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Estiimating Elasticities Of Demand And Supply For South African Manufactured Exports Using A Vector Error Correction Model

Author

Listed:
  • Alberto Behar

    (School of Economics, University of Cape Town)

  • Lawrence Edwards

    (School of Economics, University of Cape Town)

Abstract

Elasticities 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.

Suggested Citation

  • Alberto Behar & Lawrence Edwards, 2004. "Estiimating Elasticities Of Demand And Supply For South African Manufactured Exports Using A Vector Error Correction Model," Development and Comp Systems 0409045, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpdc:0409045
    Note: Type of Document - pdf; pages: 16
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/dev/papers/0409/0409045.pdf
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    Cited by:

    1. Cagri Sarikaya, 2004. "Export Dynamics in Turkey," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 4(2), pages 41-64.
    2. Alberto Behar, 2005. "Does training benefit those who do not get any? Elasticities of complementarity and factor price in South Africa," Economics Series Working Papers 244, University of Oxford, Department of Economics.
    3. Margaret Chitiga & Ramos Mabugu & Hélène Maisonnave & Véronique Robichaud & Bernard Decaluwé, 2009. "The Impact of the International Economic Crisis in South Africa," Cahiers de recherche 0952, CIRPEE.
    4. Melitón Ramirez Mattos, 2005. "Econometric Model for Cement demand and supply in Bolivia," Econometrics 0508019, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Political Economy and Comparative Economic Systems

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