Vector Autoagressive (VAR) Analysis of the Dynamic Link Among Producer Prices, Area and Yield of Cassava in Nigeria

Orefi Abu

No 288320, 2017 Annual NAAE Conference, October 16-19, Abeokuta, Nigeria from Nigerian Association of Agricultural Economists

Abstract: This study analyzed the relationship among producer prices, area harvested and yield of cassava in Nigeria. The study used annual time series data spanning from 1991 to 2014. Results from Augmented Dickey Fuller test showed that the series were integrated of order one, 1(1 ). Johansen cointegration test showed there was no long-run relationship among the variables. Results from the VAR estimates showed that producer prices have significant influence on area harvested and yield of cassava even though there was no long-run relationship among the variables during the period of study. Also the variance decomposition analyses showed that over time the results reveal that only about 26.21 and 27.91 percent of changes in producer prices is explained by changes in area harvested and yield respectively. This implies that producer prices are mainly influenced by changes in its own shock and not changes in area harvested and yield. Results showed that there exist bidirectional causalities between yield and area harvested, while a unidirectional causality was found to exist between producer prices and area harvested as well as between yield and producer prices. Consequently, given the influence of producer prices on the area harvested and yield of cassava, price policies that will encourage farmers to put additional area into the cultivation of cassava ought to be promoted.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Pages: 7
Date: 2017-10
New Economics Papers: this item is included in nep-bec
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Persistent link: https://EconPapers.repec.org/RePEc:ags:naae17:288320

DOI: 10.22004/ag.econ.288320

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