An Econometric Estimation of Import Demand Function

This paper examines a disaggregated import demand model for Cote d’Ivoire using time series data for the period 1970-2007. An Autoregressive Distributed Lag (ARDL) modeling process is employed to capture the effect of final consumption expenditure, the investment expenditure, the export expenditure and relative prices on import demand. Amongst the key results it is found that a long run cointegration relationship between the variables; and shows inelastic import demand for all the expenditure components and relatives prices. In the long run, investment and exports are the main determinant in Cote d’Ivoire imports. However in the short run both of the components of expenditures are the major determinants of Import demand. Import demand is not sensitive to price changes