Simulating impacts of increased production costs on the Iranian pistachio export and market power

Document Type : Research Paper

Authors

• F. T
• s.n m
• z. f
• m. j

Abstract

The objective of this study is to analysis impact of increase in production costs on export and market power of Iran in pistachio world market. To get the objective a system of equations including domestic supply and demand, import demand and export price as well as data set of 1980-2009 was applied. The results showed an elastic domestic supply and import demand with respect to price while domestic demand was found inelastic. It was also found that 1.39 percent increase in interest rate as representative of production costs induces a reduction of 0.56 and 0.3 percent in export and the Iranian market power, respectively. The findings of welfare analysis also indicated that producers, consumers as well as exporters as a whole will suffer from annual loss of 158 billion Rilas as production costs increases by 1.39 percent, of which the most accounts for producers.

Keywords

• Production Cost
• Market power
• export
• Pistachio

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