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Nutrition and economic growth in South Africa: A momentum threshold autoregressive (MTAR) approach

  • Phiri, Andrew
  • Dube, Wisdom

Purpose: This purpose of our paper is to examine asymmetric co-integration effects between nutrition and economic growth for annual South African data from the period 1961-2013. Design/methodology/approach: We deviate from the conventional assumption of linear co-integration and pragmatically incorporate asymmetric effects in the framework through a fusion of the momentum threshold autoregressive and threshold error correction (MTAR-TEC) model approaches, which essentially combines the adjustment asymmetry model of Enders and Silkos (2001); with causality analysis as introduced by Granger (1969); all encompassed by/within the threshold autoregressive (TAR) framework, a la Hansen (2000). Findings: The findings obtained from our study uncover a number of interesting phenomena for the South Africa economy. Firstly, in coherence with previous studies conducted for developing economies, we establish a positive relationship between nutrition and economic growth with an estimated income elasticity of nutritional intake of 0.15. Secondly, we find bi-direction causality between nutrition and economic growth with a stronger causal effect running from nutrition to economic growth. Lastly, we find that in the face of equilibrium shocks to the variables, policymakers are slow to responding to deviations of the variables from their co-integrated long run steady state equilibrium. Originality/value: In our study, we make a novel contribution to the literature by exploring asymmetric modelling in the correlation between nutrition intake and economic growth for the exclusive case of South Africa.

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File URL: http://mpra.ub.uni-muenchen.de/52950/1/MPRA_paper_52950.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 52950.

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Date of creation: 14 Jan 2014
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Handle: RePEc:pra:mprapa:52950
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  2. Ogundari, Kolawole, 2011. "Estimating Demand for Nutrients in Nigeria: A Vector Error Correction Model," MPRA Paper 28930, University Library of Munich, Germany.
  3. Rasmus Heltberg, 2009. "Malnutrition, poverty, and economic growth," Health Economics, John Wiley & Sons, Ltd., vol. 18(S1), pages S77-S88, April.
  4. Behrman, Jere R & Deolalikar, Anil B, 1989. "Is Variety the Spice of Life? Implications for Calorie Intake," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 666-72, November.
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  7. Shelley, Gary L. & Wallace, Frederick H., 2011. "Further evidence regarding nonlinear trend reversion of real GDP and the CPI," Economics Letters, Elsevier, vol. 112(1), pages 56-59, July.
  8. Ogundari, Kolawole & Abdulai, Awudu, 2013. "Examining the heterogeneity in calorie–income elasticities: A meta-analysis," Food Policy, Elsevier, vol. 40(C), pages 119-128.
  9. Giovanni Vecchi & Michela Coppola, 2004. "Nutrition And Growth In Italy, 1861-1911 What Macroeconomic Data Hide," Working Papers in Economic History wh043101, Universidad Carlos III, Instituto Figuerola de Historia y Ciencias Sociales.
  10. Harris Neeliah & Bhavani Shankar, 2008. "Is nutritional improvement a cause or a consequence of economic growth? Evidence from Mauritius," Economics Bulletin, AccessEcon, vol. 17(8), pages 1-11.
  11. Deolalikar, Anil B, 1988. "Nutrition and Labor Productivity in Agriculture: Estimates for Rural South India," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 406-13, August.
  12. Halicioglu, Ferda, 2011. "The Demand for Calories in Turkey," MPRA Paper 41807, University Library of Munich, Germany.
  13. Bruce E. Hansen, 2000. "Sample Splitting and Threshold Estimation," Econometrica, Econometric Society, vol. 68(3), pages 575-604, May.
  14. Fan, Shenggen & Pandya-Lorch, Rajul, 2012. "Reshaping agriculture for nutrition and health: An IFPRI 2020 book," IFPRI books, International Food Policy Research Institute (IFPRI), number 2020 Conference Book.
  15. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
  16. Stiglitz, Joseph E, 1976. "The Efficiency Wage Hypothesis, Surplus Labour, and the Distribution of Income in L.D.C.s," Oxford Economic Papers, Oxford University Press, vol. 28(2), pages 185-207, July.
  17. Behrman, Jere R & Deolalikar, Anil B, 1987. "Will Developing Country Nutrition Improve with Income? A Case Study for Rural South India," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 492-507, June.
  18. Enders, Walter & Siklos, Pierre L, 2001. "Cointegration and Threshold Adjustment," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(2), pages 166-76, April.
  19. Salois, Matthew & Tiffin, Richard & Balcombe, Kelvin, 2010. "Calorie and Nutrient Consumption as a Function of Income: A Cross-Country Analysis," MPRA Paper 24726, University Library of Munich, Germany.
  20. Beechey, Meredith & Österholm, Pär, 2008. "Revisiting the uncertain unit root in GDP and CPI: Testing for non-linear trend reversion," Economics Letters, Elsevier, vol. 100(2), pages 221-223, August.
  21. Richard Tiffin & P. J. Dawson, 2002. "The Demand for Calories: Some Further Estimates from Zimbabwe," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 221-232.
  22. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
  23. Fogel, Robert W, 2004. "Health, Nutrition, and Economic Growth," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 643-58, April.
  24. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  25. William E. Cole, 1971. "Investment in Nutrition as a Factor in the Economic Growth of Developing Countries," Land Economics, University of Wisconsin Press, vol. 47(2), pages 139-149.
  26. Emmanuel Skoufias & Vincenzo Di Maro & Teresa González-Cossío & Sonia Rodríguez Ramírez, 2009. "Nutrient consumption and household income in rural Mexico," Agricultural Economics, International Association of Agricultural Economists, vol. 40(6), pages 657-675, November.
  27. Satoru Shimokawa, 2010. "Asymmetric Intrahousehold Allocation of Calories in China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(3), pages 873-888.
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