An Error Correction Model of Demand for Various Kinds of Imported and Domestic Rice in Iran

An Error Correction Model of Demand for Various Kinds of Imported and Domestic Rice in Iran

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Rice is an important item in the Iranian agricultural product imports.This paper presents the estimation of an error correction model of linear approximation of 9x11 pergola the Almost Ideal Demand System for various kinds of imported rice, including Pakistanian, Thai, and others, as well as Iranian rice.The period of the study covers the period1981-2004.The findings of the research show that short-run and long-run Marshalian own price elasticities are negative except for that of Pakistanian rice wich has a positive elastivity in the short-run, though very close to zero.The short-run Hicksian own price elasticities are all negative and close to those of Marshalian ones, except for Pakistanian rice which is positive in both cases.

The Hicksian cross elasticties indicate that all Pakistanian and Thai rice are imported by government in response to the read more shortages in the domestic market.That is the complementarity of the domestic and the imported rice is not due to the consumer preferances.