Table 7 Elasticity values, market shares, and conversion rates
Variables description | Value | Sources | |
|---|---|---|---|
\( {\varepsilon}_y^{\mathrm{EU}} \) | Palm oil own price demand elasticity in the European Union | −0.38 | FAPRI (2013) elasticities database |
\( {\varepsilon}_y^{\mathrm{ROW}} \) | Palm oil own price demand elasticity in the rest of the world | −0.38 | |
\( {\varepsilon}_y^{\mathrm{Dom}} \) | Palm oil own price demand elasticity in Indonesia | −0.38 | |
\( {\alpha}_y^{\mathrm{EU}} \) | CPO export demand share of total output to EU markets | 0.22 | Calculated based on Trade data (2010) |
\( {\alpha}_y^{\mathrm{ROW}} \) | CPO export demand share of total output to ROW markets | 0.52 | |
\( {\alpha}_y^{\mathrm{Dom}} \) | CPO domestic demand share | 0.26 | |
v Land | Elasticity of land supply | 0.3 | Salhofer (2000); Jafari and Jamal (2015, 2016, 2011); Jamal and Jafari (2011). |
v Lab | Elasticity of labor supply | 0.55 | |
v Cap | Elasticity of capital supply | 2 | |
v Chem | Elasticity of agrochemical supply | 2 | |
γ | Elasticity of forest conversion with respect to oil palm expansion | 0.19 | Gunarso et al. (2013) |
μ | Elasticity of peatland conversion with respect to oil palm expansion | 0.35 |