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Supply Response in the Northeastern Fresh Tomato Market: Cointegration and Error Correction Analysis

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  • Weliwita, Ananda
  • Govindasamy, Ramu

Abstract

This paper reexamines supply response in the Northeastern fresh tomato market during the 1949–94 period by employing cointegration and error correction technique. It tests whether there has been a long-run equilibrium relationship between Northeastern production and a set of price and nonprice factors that influence it. Findings suggest that wage rate, imports from competing regions, and urban pressure have had significant negative impacts on regional production. The negative relationship between price and production may have resulted from the strong negative effects exerted by the nonprice factors.

Suggested Citation

  • Weliwita, Ananda & Govindasamy, Ramu, 1997. "Supply Response in the Northeastern Fresh Tomato Market: Cointegration and Error Correction Analysis," Agricultural and Resource Economics Review, Cambridge University Press, vol. 26(2), pages 247-255, October.
    • Handle: RePEc:cup:agrerw:v:26:y:1997:i:02:p:247-255_00
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    1. Hallam, David & Zanoli, Raffaele, 1993. "Error Correction Models and Agricultural Supply Response," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 20(2), pages 151-166.
    2. Dunn, James W., 1981. "The Effect of Higher Energy Prices on the Competitive Position of Northeast Agriculture," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 2), pages 1-4, October.
    3. Perron, Pierre, 1988. "Trends and random walks in macroeconomic time series : Further evidence from a new approach," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 297-332.
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    5. Nickell, Stephen, 1985. "Error Correction, Partial Adjustment and All That: An Expository Note," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 47(2), pages 119-129, May.
    6. van den Berg, Hendrik & Jayanetti, Sanath C., 1993. "A novel test of the monetary approach using black market exchange rates and the Johansen-Juselius cointegration method," Economics Letters, Elsevier, vol. 41(4), pages 413-418.
    7. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    8. Osterwald-Lenum, Michael, 1992. "A Note with Quantiles of the Asymptotic Distribution of the Maximum Likelihood Cointegration Rank Test Statistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 461-472, August.
    9. Dunn, James W., 1981. "The Effect of Higher Energy Prices on the Competitive Position of Northeast Agriculture," Journal of the Northeastern Agricultural Economics Council, Northeastern Agricultural and Resource Economics Association, vol. 10(2), pages 1-4, October.
    10. Lopez, Rigoberto A. & Munoz, Arnold O., 1987. "Supply Response In The Northeastern Fresh Tomato Market," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 16(01), pages 1-9, April.
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    Cited by:

    1. Yoon, Jongyeol & Brown, Scott, 2017. "Examination of asymmetric supply response in the U.S. livestock industry," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252779, Southern Agricultural Economics Association.
    2. Howard, Joshua C. & Cakan, Esin & Upadhyaya, Kamal P., 2016. "Climate Change And Its Impact On Wheat Production In Kansas," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(2), pages 1-10, April.
    3. Jeder, Houcine & Naimi, Abdelmonem & Oueslati, Adnen, 2017. "Transmission Between Retail And Producer Prices For Main Vegetable Crops In Tunisia," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 5(01), January.
    4. Abu, O. & Okpe, A.E. & Abah, D.A., 2018. "Effects of Climate and Other Selected Variables on Rice Output Response in Nigeria," Nigerian Journal of Agricultural Economics, Nigerian Journal of Agricultural Economics, vol. 8(01), October.

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