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Estimating elasticities of demand and supply for South African manufactured exports using a vector error correction model Alberto Behar, School of Economics, University of Cape Town Lawrence Edwards, School of Economics, Cape Town Download the Paper (PDF format) - May 2, 2004 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing. ABSTRACT: Elasticities of demand and supply for South African manufactured exports are estimated using a vector error correction model in order to address simultaneity and non-stationarity issues. Demand is highly price-elastic, with elasticities ranging from –3 to –6. The price elasticity of supply is generally about 1, but some estimates are as low as 0.35. Competitors’ prices and world income are important determinants of demand, but domestic capacity utilization is not an important determinant of export supply. Many different data alternatives are sourced, constructed and estimated, showing the results can be sensitive to the choice of series. SUGGESTED CITATION: Alberto Behar and Lawrence Edwards, "Estimating elasticities of demand and supply for South African manufactured exports using a vector error correction model " (May 2, 2004). The Centre for the Study of African Economies Working Paper Series. Working Paper 204. http://www.bepress.com/csae/paper204