estimating the demand function for gold in iran from 1995 to 2016 (a state-space model)

estimating the demand function for gold in iran from 1995 to 2016 (a state-space model)

the main purpose of this study is to estimate the demand function and price elasticity of demand for gold in iran from 1995 to 2016. in this paper, the demand for gold has been estimated by the state-space model and the kalman filter technique in a time-varying pattern.

based on the results, it can be concluded that one-percent increase in the real price of gold demandresults in1.17 percent decreas in in gold demand. the elasticity of gold demand and gdp is not statistically significant morever the elasticity of gold demand and population variable indicates that one percent increase in the population of iran, leads to 0.03 percent increase as well .the price elasticity of demand for gold in iran from 1990 to 2016 has almost risen, indicating an increase in the sensitivity of gold consumers in the face of gold price changes.