The main objective of this study is to identify the main economic factors
which affect the supply response of saffron in Iran using panel data
econometrics approach. Estimating saffron supply response, especially
price response, helps us for planning and policy making with the objective
of stimulating the supply.
Two important hypotheses can be considered: Expected output price has a significant positive effect on cultivation of
saffron and liberalization of the official exchange rate in 1996 has positive effect
on the cultivation.
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