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Investigating the Elasticity of Supply and Demand for Rice Export in Iran

Author Affiliations

  • 1 Department of Economic, Qaemshahr Branch, Islamic Azad University, Qaemshahr, IRAN

Res. J. Recent Sci., Volume 1, Issue (10), Pages 12-18, October,2 (2012)

Abstract

This article estimates the major determinants of supply and demand for Rice Export in Iran. This study uses annual time series data (1989-2006) and unit root tests and analyze them using Auto Regressive Distributed Lag (ARDL) model by Pesaran et al. (2001). This co-integration technique accommodates potential structural breaks that could undermine the existence of a long-run and significant relationship between supply and demand for Rice Exportand its main determinants. Error correction coefficient is negative and small and is equal to 0.54 and it shows that if there is any shock or imbalance in total production, the system will be back to stability after a 3-year period. Together the independent variables explained 91% of the variance in the dependent variables. The remaining 9% was due to unidentified variables. In relation to that, we can conclude that explanatory power is high for the equation.

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