Estimating the Price and Income Elasticities of Mutual Trade Among Iran and ECO, By Using Panel Data

In this paper, the panel data econometric model has been used for estimating the price, income and Iran's import (from ECO and ECO imports from Iran) elasticities during the 1998-2002 period. The estimated elasticities of mutual Iran-ECO trade indicate that importing and exporting income elasticity, price and substitution elasticities of Iran's imports (from ECO) are 1.21, 0.74,-0.42 and 0.07 respectively, while importing and exporting income elasticities, price and import to GDP ratio elasticities of ECO imports(from Iran) are 0.84, 0.71, 0.6 and 0.45 respectively. Indeed, income elasticity of Iran's imports from ECO members is greater than income elasticity of Iran's exports to ECO, however price elasticity of Iran's exports to ECO is greater than of absolute value of price elasticity of Iran's imports from ECO countries.