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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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