The Estimation of the Elasticity of the Production Factors of the Mining Sector of Iran

One of the most important mineral producers in the world is Iran. In order to do the research, first, the annual time series data is 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 it involves OLS method using 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.