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Estimating the Aggregate Agricultural Supply Response: A Survey of Techniques and Results for Developing Countries

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Rainer Thiele

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Abstract

For many low-income countries, the impact of structural reforms on economic growth and poverty alleviation crucially depends on the response of aggregate agricultural supply to changing incentives. Despite its policy relevance, the size of this parameter is still largely unknown. This paper discusses the different approaches which may be employed to quantify the agricultural supply response. It turns out that none of these approaches is likely to deliver unbiased estimates. While in cross-country regressions the problem of unobserved country characteristics cannot be fully eliminated, time-series estimations tend to suffer from the Lucas critique. Any comprehensive empirical analysis should thus rely on more than one technique in order to check the robustness of results.

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Publisher Info
Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1016.

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Length: 22 pages
Date of creation: Dec 2000
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Handle: RePEc:kie:kieliw:1016

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Related research
Keywords: agricultural supply response; cross-country regressions; Nerlove method; co-integration; dynamic general equilibrium analysis.;

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Find related papers by JEL classification:
C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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  1. Marc Nerlove, 1979. "The Dynamics of Supply: Retrospect and Prospect," Discussion Papers 394, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  2. Schiff, Maurice & Montenegro, Claudio E, 1997. "Aggregate Agricultural Supply Response in Developing Countries: A Survey of Selected Issues," Economic Development and Cultural Change, University of Chicago Press, vol. 45(2), pages 393-410, January.
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  3. Binswanger, Hans & Yang, Maw-Cheng & Bowers, Alan & Mundlak, Yair, 1987. "On the determinants of cross-country aggregate agricultural supply," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 111-131. [Downloadable!] (restricted)
  4. Jean-Philippe Platteau, 1996. "Physical infrastructure as a constraint on agricultural growth: The case of sub-Saharan Africa," Oxford Development Studies, Taylor and Francis Journals, vol. 24(3), pages 189-219. [Downloadable!] (restricted)
  5. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July. [Downloadable!] (restricted)
  6. Kherallah, Mylène & Delgado, Christopher L. & Gabre-Madhin, Eleni Z. & Minot, Nicholas. & Johnson, Michael., 2000. "The road half traveled," Food policy reports 10, International Food Policy Research Institute (IFPRI). [Downloadable!]
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    • Kherallah, Mylène & Delgado, Christopher L. & Gabre-Madhin, Eleni Z. & Minot, Nicholas & Johnson, Michael, 2000. "The road half traveled," Issue briefs 2, International Food Policy Research Institute (IFPRI). [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Olubode-Awosola, O.O. & Oyewumi, O.A. & Jooste, A., 2006. "Vector error correction modelling of Nigerian agricultural supply response," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(4), December. [Downloadable!]
  2. Rainer Thiele, 2002. "The Bias Against Agriculture in Sub-Saharan Africa: Has It Survived 20 Years of Structural Adjustment Programs?," Kiel Working Papers 1102, Kiel Institute for the World Economy. [Downloadable!]
  3. Rainer Thiele, 2002. "Price Incentives, Non-Price Factors, and Agricultural Production in Sub-Saharan Africa: A Cointegration Analysis," Kiel Working Papers 1123, Kiel Institute for the World Economy. [Downloadable!]
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