Estimation of export supply and demand functions for Iran saffron by simultaneous equations system

  Saffron is important because of low water requirements, high employment rate and high export value, in agricultural sector and this research is an attempt to study the factors which affect saffron export. For this purpose, supply and demand functions of saffron for both long and short term periods were estimated by using FIML method. We use time series data during 1987-2004 and demand and supply elasticity is calculated as well. The results show that although Iran can increase its income in short term by increasing the price, it needs more other appropriate policies to be taken in long term. More over, supply can be affected by price policy in long term rather than short term. Finally some policies and proposals are advised so that applying a few instruments in short and long run can be conductible at this case.   JEL Classification : C32