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Government policy and dynamic supply response: a study of the compulsory grain delivery system

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  • Taffesse, Alemayehu Seyoum

Abstract

The impact of government policy on the dynamics of agricultural supply in Ethiopia during the 1980s is explored. Specifically, an intertemporal acreage allocation model that allows for the impact of compulsory grain delivery is developed. Subsequently, an estimable dynamic acreage demand equation is derived, and estimated for a crop using region-level data. Generalized Method of Moments (GMM) estimators for dynamic panel data models are used. The elasticity estimates thus obtained suggest that the demand for crop acreage (and hence the supply of crop output) responded negatively to the level of forced grain procurement, and positively to output price.

Suggested Citation

  • Taffesse, Alemayehu Seyoum, 1997. "Government policy and dynamic supply response: a study of the compulsory grain delivery system," MPRA Paper 18674, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18674
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    References listed on IDEAS

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    Cited by:

    1. Rashid, Shahidur & Negassa, Asfaw, 2012. "Policies and performance of Ethiopian cereal markets," IFPRI book chapters, in: Dorosh, Paul A. & Rashid, Shahidur (ed.), Food and agriculture in Ethiopia: Progress and policy challenges, chapter 5, International Food Policy Research Institute (IFPRI).

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    More about this item

    Keywords

    compulsory grain deliver system; agricultural supply response; dynamic panel date models;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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