Deriving Brick Demand Equation for Brick Kiln industry of North Sindh

Abstract

Brick is the main input for house construction and house is the final product of brick kiln industry. Many variables affect demand of house i.e. labour, brick price, brick substitutes, brick compliments, consumer numbers, taste, technology, future price of brick, transport and weather costs. Cobb Douglass Production Function is used to derive brick house Demand Equation. It is type of production function in which technological relationship among inputs and also between inputs and output is represented. Total used bricks at house (Y) is dependent variable and input costs to manufacture that house are independent variables, i.e. x1, x2, x3, etc. in this model. Eleven natural log independent variables are used. Results are at adjusted at R2 value of 0.99 with significant model ANOVA. Except one all variables are significant Technology Cost is insignificant. Brick price, PR2, weather cost, labour cost and technology have negative relation with house demand. House is normal good as income coefficient is positive.