Open AccessEstimation of Indonesia Wooden Furniture Export Demand Function
Author(s) -
Hanna Sri Meiliani Uli Simangunsong,
Bintang C.H. Simangunsong,
Elisa Ganda Togu Manurung
Publication year - 2021
Publication title -
jurnal sylva lestari/jurnal sylva lestari : journal of sustainable forest
Language(s) - English
Resource type - Journals
eISSN - 2549-5747
pISSN - 2339-0913
DOI - 10.23960/jsl.v9i3.482
Subject(s) - panel data , ordinary least squares , price elasticity of demand , demand curve , fixed effects model , furniture industry , econometrics , economics , income elasticity of demand , value (mathematics) , elasticity (physics) , regression analysis , estimation , agricultural economics , microeconomics , commerce , mathematics , statistics , materials science , management , composite material
The export value of Indonesia’s wooden furniture was sharply decreased by about 31.9% over the period in 2007-2018. On the other hand, global wooden furniture export was increased by 5.8% during the same period. Understanding the behavior of the demand side of Indonesia’s wooden furniture exports that is reflected by its relative price and income elasticities is needed for the policy development of Indonesia’s wooden furniture industry in the future. The objective of this study was to estimate the export demand function of Indonesia wooden furniture using a panel data regression model. Three types of panel data models, such as pooled ordinary least squares model, fixed-effects model, and random effects model, were investigated. The results showed that the export demand function of Indonesia wooden furniture could be well estimated using the fixed effects model. Relative price elasticity and income elasticity were -0.45 and 0.8, respectively. The adjusted R2 value obtained was 0.99.Keywords: export demand function, panel data regression, wooden furniture