Econometric analysis of the supply and demand for onion in Thailand
1998
Nong Charoennak
Main objective of this study is to analyze factors affecting the supply and demand for onion in Thailand by econometric method. The secondary data of time series between 1981-1995 was utilized in the study. The main sources of secondary data were collected from the Office of Agricultural Economics, Cooperatives Promotion Department, and Department of Business Economics. Both descriptive and quantitative analysis were utilized in the study. Multiple regression technique and ordinary least squares method were employed to estimate supply and demand functions of four equations: planted area, yield per rai, demand for domestic consumption, and demand for export. The analysis of t-statistics indicated that all independent variables significantly affected the supply and demand. It was found that the elasticities of one by one equation with respected to ten independent variables: planted area in the previous year, farm prices of onion in the previous year, farm prices of shallot in the previous year, farm price of onion, rainfall, wholesale prices of onion, national income, wholesale prices of shallot, FOB prices of onion and production of onion in Japan were significant with expected trend. The recommendations are as follow: 1) to promote farmers to store onions when price going down and market them when price rising up; 2) to establish a production plan of onions in irrigation areas; and 3) control planted area in order to improve onions price unstabilization.
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