Price and non-price decision making factors of groundnut production in Karnataka: evidence from vector error correction model

The study was conducted in Karnataka state with an objective to assess the decision making factors in land allocation sustainability of groundnut production. The results of the coefficients of area response of groundnut indicated that thetotal rainfall had exerted significant positive influence on current year’s area of groundnut in Mysore division and Karnataka. The coefficients of production response of groundnut indicated that the lagged production had exerted significant negativeinfluence on current year’s production of groundnut in Bangalore, Gulbarga and Karnataka. The result showed that long run relationship existsed between dependent and independent variable in some divisions. The results indicated that the priceinelasticity of supply in both short run as well as long run all the division except some. The study concluded that non-price determinants were more significant for decision making and complementary to price for land allocation in sustainableproduction of groundnut in the state.