Estiimating Elasticities Of Demand And Supply For South African Manufactured Exports Using A Vector Error Correction Model
AbstractElasticities of demand and supply for South African manufactured exports are estimated using a vector error correction model in order to address simultaneity and non-stationarity issues. Demand is highly price- elastic, with elasticities ranging from -3 to –6. The price elasticity of supply is generally about 1, but some estimates are as low as 0.35. Competitors’ prices and world income are important determinants of demand, but domestic capacity utilization is not an important determinant of export supply. Many different data alternatives are sourced, constructed and estimated, showing the results can be sensitive to the choice of series.
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Length: 16 pages
Date of creation: 28 Sep 2004
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- Alberto Behar & Lawrence Edwards, 2004. "Estimating elasticities of demand and supply for South African manufactured exports using a vector error correction model," CSAE Working Paper Series 2004-04, Centre for the Study of African Economies, University of Oxford.
- Alberto Behar and Lawrence Edwards, 2004. "Estimating elasticities of demand and supply for South African manufactured exports using a vector error correction model," Economics Series Working Papers WPS/2004-04, University of Oxford, Department of Economics.
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