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Rubber acreage supply response in Thailand: a cointegration approach

Author

Listed:
  • Kittikorn Soontaranurak

    (Nakhon Si Thammarat Rajabhat University, Thailand)

  • P.J. Dawson

    (Newcastle University, UK)

Abstract

This paper estimates the acreage supply response of natural rubber in Thailand using cointegration methods. Results show that a unique long-run relationship exists between area planted, the rubber price and the replanting subsidy, and the rubber price is weakly exogenous. The short-run own price elasticity of acreage response is low at 0.04 whereas the corresponding long-run elasticity is 2.24, and the use of pricing policy takes a long lead time to take effect. The acreage elasticity in response to a change in the subsidy is 1.17 and the replanting subsidy is a key driver for increasing rubber production.

Suggested Citation

  • Kittikorn Soontaranurak & P.J. Dawson, 2015. "Rubber acreage supply response in Thailand: a cointegration approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(2), pages 23-38, April-Jun.
    • Handle: RePEc:jda:journl:vol.49:year:2015:issue2:pp:23-38
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    More about this item

    Keywords

    Thailand; natural rubber; acreage response; cointegration;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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