The Effect of Cultivated Area and the Prices of Buying the Rice on Its Production in AL- Qadisiyah Province-Iraq During (1990-2014) by Using VECM (original) (raw)
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Estimation of Agricultural Supply Response Using Cointegration Technique
The Indian Economic Journal, 2009
The issue of agricultural supply response is a very important one as it has an impact on growth, poverty, and environment. The size of agricultural supply response is expected to improve after removing some of the constraints that farmers were facing before. Though many constraints have been removed from agrarian system and many incentives have been provided to farmers, still the supply response for Indian agriculture is price inelastic. Hence the question "why supply response is price inelastic" becomes relevant. The present study is an attempt to find supply response through cointegration approach and to see if the response has been better at the all India level in comparison to previous studies. Further, it also focuses on the question whether there is difference in the supply response among highly agricultural based, medium agricultural based, and low agricultural based states. The study indicates that aggregate agricultural output elasticity with respect to agricultural TOT is very low and not statistically different from zero.
2019
This study analyzed the relationship among producer prices of cassava, rice and maize in Nigeria. The study used annual time series data spanning from 1991 to 2013. Results from Augmented Dickey Fuller test showed that the time series data were not stationary in their level forms but were integrated of order one, 1. The trace test and maximum Eigen values of Johansen co-integration test indicated 3 co-integrations at the 5 percent level which showed there is a long run relationship among the variables during the period of study. The result of the VECM showed the Maize producer price responded faster than the Cassava and Rice prices. The adjustment coefficient was not statistically significant for the three selected producer prices suggesting that the Cassava and Rice prices are strongly exogenous. This implies that movement in Cassava and Rice prices was highly affected by price in Maize while movement in price of Maize was dictated by events in cassava and rice prices. This means that the long run equilibrium in the producer prices after exogenous shock is restored primarily by corrections made by producer prices of maize. Granger causality showed that cassava producer price determined the producer prices of rice and maize which indicated a unidirectional causality. Producer prices of rice and maize neither granger caused each other. Hence, the null hypothesis that the producer price does not granger cause each other is rejected. Therefore, price policy in favour of cassava cultivation should be promoted.
Indonesian Journal of Statistics and Its Applications
This paper contributes to explain the relationship between oil fuel prices, oil price, the exchange rates, and agricultural commodity prices in Indonesia by using panel cointegration. Thus, this paper studied the short- and long-run relationships between oil fuel prices, oil prices, exchange rates, and agricultural commodity prices using the panel cointegration and causality analysis on five main agricultural commodities in Indonesia (i.e. rice, beef, palm oil, red chili, and sugar). The study was conducted using weekly agricultural, oil fuel, oil prices, and exchange rates from October 2014 until May 2016. The results showed that the oil fuel prices and the exchange rate had a long-run impact on agricultural commodity prices. The direction of the causality had also been determined. The oil fuel prices, oil prices, and exchange rate altogether had a unidirectional Granger causality to all of the agricultural commodity prices except beef and palm oil prices in the long-run.
Supply response of wheat in Bangladesh: Cointegration and vector error correction analysis
African Journal of Agricultural Research, 2013
Numerous past studies on wheat cultivation in Bangladesh is criticized for using the weaker Nerlovian Partial Adjustment models and also for analytical interpretation through Ordinary Least Square (OLS) creating spurious results for time series data. This problem can be avoided if Econometric technique of co-integration is used. It is for this the present paper estimates the supply response of wheat in Bangladesh by using the modern technique of co-integration with Vector Error Correction Model (VECM). Our unit root analysis indicates that underlying data series were not stationary and are all integrated of order one, that is I(1). The Johansen multivariate co-integration approach indicates the presence of a co-integrating relationship in the supply response model. Wheat acreage is significantly influenced by price of wheat, and other competing crops such as Boro rice. The non-price factors weather has a highly positive effect on wheat area in the short-run. The wheat supply elasticity's are found to be inelastic both in the short-and long-run. The long-run and short run price elasticity's were 0.95 and 0.47, respectively.
Estimation of Agricultural Supply Response by Cointegration Approach
The Indian Economic Journal, 2009
The issue of agricultural supply response is a very important one as it has an impact on growth, poverty, and environment. The size of agricultural supply response is expected to improve after removing some of the constraints that farmers were facing before. Though many constraints have been removed from agrarian system and many incentives have been provided to farmers, still the supply response for Indian agriculture is price inelastic. Hence the question "why supply response is price inelastic" becomes relevant. The present study is an attempt to find supply response through cointegration approach and to see if the response has been better at the all India level in comparison to previous studies. Further, it also focuses on the question whether there is difference in the supply response among highly agricultural based, medium agricultural based, and low agricultural based states. The study indicates that aggregate agricultural output elasticity with respect to agricultural TOT is very low and not statistically different from zero.
Universal journal of agricultural research, 2024
Market integration plays a key role in ensuring prevailed price signal in a market well transmitted to the other spatially connected markets. The actors in the market will get symmetrical information to prevent one party from exploiting another to get excessive arbitrage profit. This research aims to test the existence of integration in rice markets in South Kalimantan Province, Indonesia. Weekly composite rice price in three market locations, namely Banjarmasin City, Tabalong, and Kotabaru from July 2020 to March 2023 was observed. The unit root test to check stationarity data and the cointegration test were carried out. The ADF unit root test results showed that data were not stationary but became stationary after being differencing in level one. Johansen's cointegration results showed that there was a cointegration that represents long-term equilibrium between price variables. Due to the non-stationarity of data and the presence of cointegration, the Vector Error Correction Model (VECM) is used. The estimation results showed dominant and linear influences of rice price in Banjarmasin over rice price in Kotabaru, reviewed from significant level and elasticity amount in the cointegration equation, and its consistency with the results of Granger pairwise causality test and Impulse Response Function (IRF) graphic description.
Cointegration and error correction modelling of wheat consumption in Pakistan
Humanomics, 2010
This paper provides an empirical analysis of wheat consumption in Pakistan for the period 1975 to 2006 using cointegration analysis and error correction model. The estimated long and short-run elasticities suggest that income is the most significant determinant of wheat consumption in the long run while price of wheat is the major affecting factor of wheat consumption only in the short run. The less elastic nature of wheat demand both in the short and the long run suggests that under the likely Doha Round agricultural trade liberalization, wheat price rise will harm the poor consumers
Supply Response of Boro Rice in Bangladesh: Cointegraton and Error Correction Modelling Approach
2007
The aim of this study is to increase our understanding of the specification and estimation of Boro rice (principal rice) supply response in Bangladesh as well as to provide instrument for agriculture planting decision and price policy by using econometric tools-cointegration and error correction model with careful attention to time series data to avoid spurious regression of traditional econometric analysis Econometric model has been specified on the basis of theoretical arguments. This study also provides a theoretical argument that leads to formulate an empirical model from various aspects with price and non-price variables. The study is designed to identify statistically the acreage responses of Boro rice in Bangladesh. Time series data have been used in the analysis for the period 1972-73 to 2003-04. Econometric and statistical techniques are applied to estimate the supply responses of Boro rice at the national level. Long-run own price acreage elasticities for Boro is 0.95 (nea...
International Journal of Agronomy and Plant Production, 2013
The present study attempts to analyze the asymmetrical cointegration between agriculture and economic growth in Iran using Enders & Siklos (2001) method and some other techniques available for time series econometrics. To this end, first the Kwiatkowski-Phillips-Schmidt-Shin (KPSS) unit root test and then the Engle Grenger (E-G) cointegration test were applied respectively to study the stationarity of the pattern variables, and long run and equilibrium relation after ascertaining the stationarity position of the variables.The results show the long run and equilibrium relation between variables. But the Engle Grenger cointegration test encounters to speciosity error in asymmetrical cointegration (Nonlinear relation). So for investigating this relation and following from Enders & Siklos method, both of Threshold Autoregressive (TAR) and Momentum-Threshold Autoregressive (M-TAR) models were used for asymmetrical cointegration. The results of estimating two mentioned patterns also show the asymmetrical cointegration among variables.
2010
The response of agriculture to changes in relative prices and exchange rates is an important factor in the success of any reform programme in agricultural sector of Nigeria. This study estimated the response of aggregate agricultural output to exchange rate and price movements of food and export crops in Nigeria using available time series data that span about 37 years from the Central Bank of Nigeria (CBN) Annual Reports. This study through the Augmented Dickey Fuller (ADF) and unit root test found that the variables used in the model are integrated of the same order.Using maximum likelihood estimation results also shows that the entire variables cointegrated. The results of the Vector Error Correction Model (VECM) for the estimation of short run adjustment of the variables toward their long run relationship showed a linear deterministic trend in the data and that food and export prices as well as the real exchange rate jointly explained 57% of the variation in the Nigeria aggregate agricultural output in the short run and 87% variation in the long run. Total agricultural output responds positively to increases in exchange rate and negatively to increases in food prices both in the short and long run. The significance of food crop prices and exchange rate at 5% and 1% respectively both in the short and long run suggest that changes in these variables are passed immediately to agricultural output.