Using the ARDL-ECM approach to investigate the nexus between support price and wheat production

Purpose The purpose of this paper is to examine the effect of support price on wheat production in Pakistan during the period 1971–2016. Design/methodology/approach To capture the effect of support price on wheat production, the authors estimated the long-run linkage by using the ARDL bounds testing...

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Bibliographic Details
Published in:Journal of Asian Business and Economic Studies 2019-06, Vol.26 (1), p.139-152
Main Authors: Chandio, Abbas Ali, Jiang, Yuansheng, Rehman, Abdul
Format: Article
Language:English
Subjects:
Agricultural production
Agriculture
Consumption
Crops
Farmers
Farms
Fertilizers
Food
International organizations
Irrigation
Prices
Production increases
Productivity
Rain
Time series
Wheat
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Summary:Purpose The purpose of this paper is to examine the effect of support price on wheat production in Pakistan during the period 1971–2016. Design/methodology/approach To capture the effect of support price on wheat production, the authors estimated the long-run linkage by using the ARDL bounds testing approach to cointegration. Findings This study confirmed the presence of a positive and long-term effect of area under cultivation, support price and fertilizer consumption on wheat production through ARDL bounds test. The results showed that both in the long run and short run, support price plays an important role in the enhancement of wheat production. The authors also found that the coefficients of the area under cultivation and fertilizer consumption variables were statistically significant and positive both in the long run and short run. Originality/value The use of the ARDL approach that examines the long-run and short-run effects of support price on wheat production in Pakistan makes the current study unique. An emerging economic literature suggests that only limited research has been conducted in this area.
ISSN:2515-964X
2515-964X
DOI:10.1108/JABES-10-2018-0084