Time Series Econometric Estimation of Supply Equation for Malaysian Rice Sector

Umar Haruna Suleiman, Amin Mahir Abdullah, Mad Nasir Shamsudin and Zainal Abidin Mohamed

Asian Journal of Empirical Research, 2014, vol. 4, issue 9, 455-467

Abstract: Rice production in the country is characterized by two production seasons namely, main- season and off-season. Officially, the two production seasons data usually aggregated to form single data of domestic rice supply for the nation. This aggregation is refers to as all-season rice production. All the previous studies estimated supply equation based on the aggregated data thereby denying the opportunity of having a comprehensive insight into the structural relationship exist in the off-and-main season’s rice production necessary for holistic policy analysis and decision. Hence, this study attempted estimating supply equation by disaggregation into main-season, off-season, and all-seasons’ rice production equations. Time series data (1980-2012) were collected and analyzed using both co-integration and non-co-integration approaches. For valid inference, estimated coefficients were subjected to autocorrelation, heteroskedasticity, misspefication and structural stability diagnostic-tests. The results show that estimated coefficients for main-season and off-season paddy production equations exhibited common characteristics in terms of economic and statistical properties. Therefore, the estimated coefficients for all-season paddy production, which represents the aggregate information of main and off- season’s paddy production, could still be adopted to explain relationship in supply side of the rice sector.

Keywords: Rice production seasons; estimated coefficients; policy analysis (search for similar items in EconPapers)
Date: 2014
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