Rubber acreage supply response in Thailand: a cointegration approach

Kittikorn Soontaranurak and P.J. Dawson ()
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Kittikorn Soontaranurak: Nakhon Si Thammarat Rajabhat University, Thailand
P.J. Dawson: Newcastle University, UK

Journal of Developing Areas, 2015, vol. 49, issue 2, 23-38

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.

Keywords: Thailand; natural rubber; acreage response; cointegration (search for similar items in EconPapers)
JEL-codes: O13 Q11 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.49:year:2015:issue2:pp:23-38

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