Measurement of Asian income elasticities for New Zealand exports : a cointegration approach
This paper estimates short and long run income elasticities of demand for New Zealand exports to several Asian countries. Export demand is modelled as a function of spending power using cointegration analysis. The results show that short run income elasticities for New Zealand exports vary from 0.7 (Singapore) to 3.3 (Japan). Long run income elasticities vary from 1.4 (Singapore) to 8.64 (Indonesia). In addition, the error correction terms range from -0.32 (Indonesia) to -0.86 (Japan).