An econometric analysis of the Indonesian palm oil industry


Citation

Sya'ad Afifuddin S., . and Zulkifli S., . and Mohd Fauzi M.J., . and Mohammad A., . An econometric analysis of the Indonesian palm oil industry. -69-74. ISSN 0128-1828

Abstract

The main objective of this paper is to specify and estimate a structural model of the Indonesian palm oil industry. The principal variables considered are mature planted area production of palm oil and domestic consumption of palm oil in Indonesia. The ordinary least squares (OLS) technique is used as equations for mature area and production have a recursive structure and because domestic consumption of palm oil is related only to exogenous variables. The main results are as follows: Mature area is influenced inversely by lagged wage rates and directly by lagged investment in oil palm two important determinants of planting decisions. The only variables that is significant in the estimated production function is the time trend variable a proxy for disembodied technical progress. Finally domestic consumption of palm oil is found to be highly elastic with respect to the own-price and the price of final goods


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Abstract

The main objective of this paper is to specify and estimate a structural model of the Indonesian palm oil industry. The principal variables considered are mature planted area production of palm oil and domestic consumption of palm oil in Indonesia. The ordinary least squares (OLS) technique is used as equations for mature area and production have a recursive structure and because domestic consumption of palm oil is related only to exogenous variables. The main results are as follows: Mature area is influenced inversely by lagged wage rates and directly by lagged investment in oil palm two important determinants of planting decisions. The only variables that is significant in the estimated production function is the time trend variable a proxy for disembodied technical progress. Finally domestic consumption of palm oil is found to be highly elastic with respect to the own-price and the price of final goods

Additional Metadata

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Item Type: Article
Additional Information: Summary (En)
AGROVOC Term: INDONESIA
AGROVOC Term: ANALISIS ECONOMICO
AGROVOC Term: ACEITES DE PALMAS
AGROVOC Term: CONSUMO DE ALIMENTOS
AGROVOC Term: PRODUCCION ALIMENTARIA
Depositing User: Ms. Suzila Mohamad Kasim
Last Modified: 24 Apr 2025 06:26
URI: http://webagris.upm.edu.my/id/eprint/21061

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