Investigation the causal relation of factors influencing on demand for lumber imports in Iran

The demand for the import of lumber as one of the most important imported sawnwood in Iran during the period of 1984 to 2009 is empirically analyzed using an Ordinary Least Square model (OLS). Prior to estimation, Augmented Dickey Fuller (ADF) and Philips-Perron tests were applied to investigate the stationary character of the data. Also, to test the presence of Serial Autocorrelation in the error of the regression model Breusch-Godfrey test is used. The presence of a long-run relationship between demand for lumber import and the factors effective on it was measured by Engle –Granger and Johansen- Julius Cointegration tests and finally the causal relation in short-run was analyzed by the causality test of Granger. The results indicated that the nominal exchange rate and domestic production quantity variables imparts adverse impact and GDP and the export petroleum income impose positive impact on demand for import of lumber. Also, the results showed that there exist a long –run equilibrium relationship between lumber imports in Iran and the selected macroeconomic and market variables. We find that there is a one-side causal relation from the mentioned explanatory variables to the dependence variable.