n South African Journal of Economic and Management Sciences - The primary demand for oilseeds in South Africa : an Error Correction Linear Approximated Almost Ideal Demand System (ECM-LA/AIDS) : economics

Volume 8, Issue 1
  • ISSN : 1015-8812
  • E-ISSN: 2222-3436



The paper presents the results of a study that estimated the demand relations for primary oilseeds in South Africa. The Error Correction version of Linear Approximated Almost Ideal Demand System (LA/AIDS) (ECM-LA/AIDS) were estimated. Time series data for the period 1971-2002 were analysed. Prior tests established weak separability between four oilseeds (sunflower seed, soybeans, groundnuts and cotton seed), indicating that these oilseeds should be modelled together. The results suggest that the demand for oilseeds is negatively influenced by own-price, which is consistent with economic theory, while positive long-term expenditure elasticities suggest that some oilseeds, notably sunflower seed and cotton seed, are luxury commodities in South Africa.

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