Education and Economic Growth in Haryana (India): Application of Cointegration Analysis and Vector Error Correction Model on Supply Response of Pulses in Bangladesh
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This study attempts to investigate influence of price and non-price factors on supply response of pulses in Bangladesh by using modern econometric technique of cointegration. The previous studies based on Nerlovian model have been criticised since time series data are often non-stationary and its analysis through OLS leads to spurious results. Therefore, combination of cointegration analysis and vector error correction model was used in present study to overcome the problems of Nerlovian model. This study found that long-run price elasticity of pulses is significant. Cross price elasticities of pulses are highly significant in the long-run due to their competitive nature. Moreover, long-run irrigation coefficient and market based policy reforms in the short-run also have significant positive impact on supply response of pulses. The error correction coefficient indicates that about 33 percent disequilibrium in supply can be adjusted within a year. The empirical evidence of this study suggests that comprehensive policy should be formulated by considering price and non-price factors of pulses to increase domestic production. In addition, government should develop technological facilities to more potential areas for commercial production of pulses.
Abstract
This study attempts to investigate influence of price and non-price factors on supply response of pulses in Bangladesh by using modern econometric technique of cointegration. The previous studies based on Nerlovian model have been criticised since time series data are often non-stationary and its analysis through OLS leads to spurious results. Therefore, combination of cointegration analysis and vector error correction model was used in present study to overcome the problems of Nerlovian model. This study found that long-run price elasticity of pulses is significant. Cross price elasticities of pulses are highly significant in the long-run due to their competitive nature. Moreover, long-run irrigation coefficient and market based policy reforms in the short-run also have significant positive impact on supply response of pulses. The error correction coefficient indicates that about 33 percent disequilibrium in supply can be adjusted within a year. The empirical evidence of this study suggests that comprehensive policy should be formulated by considering price and non-price factors of pulses to increase domestic production. In addition, government should develop technological facilities to more potential areas for commercial production of pulses.
참고문헌 (21)
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