Open AccessThe Impact of Price and Non-Price Factors on Area Allocated to Oilseeds in India: An Application of ARDL Model
Author(s) -
Debasis Mithiya,
Simanti Bandyopadhyay,
Kaushik Mandal
Publication year - 2021
Publication title -
applied economics and finance
Language(s) - English
Resource type - Journals
eISSN - 2332-7308
pISSN - 2332-7294
DOI - 10.11114/aef.v8i4.5238
Subject(s) - economics , distributed lag , econometrics , hausman test , short run , estimator , panel data , error correction model , estimation , cointegration , fixed effects model , microeconomics , statistics , mathematics , management
The study attempts to investigate the dynamic relationship between acreage allocation of oilseeds and price (own price and prices of competitive crops) and also search for the link between area allocation and other non-price factors including productivity, irrigation, rainfall, technology and a policy-making variable (economic liberalization). The dynamic panel data for the year 1976-77 to 2017-18 have been used in the analysis. The study has used the autoregressive distributive lag (ARDL) model to understand the relationship between the dependent and the independent variables and to investigate the long-run equilibrium relationship between them. To estimate the model, both PMG (Pooled Mean Group) and MG (Mean group) estimation methods have been used. The Hausman test has been conducted to see the difference between the PMG and the MG results. The outcomes show that PMG serves as an efficient estimator here. The error correction terms are negative and significant. The results show strong evidence of area allocation towards oilseed crops, indicate a strong co-integration among their determinants in the long run. The ARDL results indicate that the speed of adjustment towards long-run equilibrium varies from 14.8 to 40.6 percent.