Open AccessThe primary demand for oilseeds in South Africa: An error correction linear approximated and almost ideal demand system (ECM-LA/AIDS)
Author(s) -
HP Van Schalkwyk,
HD van Schalkwyk,
ZG Alemu,
PR Taljaard,
Ajuruchukwu Obi
Publication year - 2015
Publication title -
suid-afrikaanse tydskrif vir ekonomiese en bestuurswetenskappe/south african journal of economic and management sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.277
H-Index - 17
eISSN - 2222-3436
pISSN - 1015-8812
DOI - 10.4102/sajems.v8i1.1288
Subject(s) - almost ideal demand system , sunflower , ideal (ethics) , error correction model , economics , sunflower seed , mathematics , econometrics , agronomy , biology , demand management , macroeconomics , political science , cointegration , law
The paper presents the results of a study that estimated the demand relations for primary oilseeds in South Africa. The Error Correction version of Linear Approximated Almost Ideal Demand System (LA/AIDS)(ECM-LA/AIDS) were estimated. Time series data for the period 1971-2002 were analysed. Prior tests stablished weak searability between four oilseeds (sunflower seed, soybeans, groundnuts and cotton seed), indicating that these oilseeds should be modelled together. The results suggest that the demand for oilseeds is negatively influenced by own price, which is consistent with economic theory, while positive long-term expenditure elasticities suggest that some oilseeds, notably sunflower seed and cotton seed, are luxury commodities in South Africa