A Survey on Supply Side of Mines: a Case Study of Iran

Abstract

The mining sector is one of the most important factors in so many countries like Iran to achieve sustainable development. Due to importance of this sector in Iran, this paper investigates the supply side of mines in Iran. Hence, the main objective of this study is to investigate the supply side of mining in Iran. In order to get this aim, first, the annual time series data are collected from the website of Central Bank and Statistics Center of Iran. This paper determines the elasticity of the production factors of labor and capital for mining sector in Iran covering data 1988 to 2010. The Cobb-Douglas function is used to estimate mining sector production function which involves the OLS method using the EVIEWS8 and SPSS software. According to the results of this study during the years of the study the coefficients of the natural logarithm of the real capital and the natural logarithm of the labor in Iran are 1.621488 and 2.962340, respectively and these coefficients are statistically significant at the 5% confidence level. Indeed, these coefficients show the amount of elasticity of production factors for the mining sector in Iran. Hence, if the capital in the mining sector increases one percentage then the production in this sector increases 1.621488 and while the labor in this sector increases one percentage, then the production in this sector increases 2.962340 percent.