Estimating Supply Response of Some Strategic Crops in Egypt Using ARDL Model
Moataz Eliw *
Department of Agricultural Economics, Faculty of Agriculture, Al-Azhar University, Assuit, P.O.Box. 71524, Egypt and College of Economics and Management, Huazhong Agricultural University, 430070 P.R. China.
Abbas Mottawea
Department of Agricultural Economics, Faculty of Agriculture, Al-Azhar University, Cairo, P.O.Box 11651, Egypt.
Ahmed El-Shafei
Department of Agricultural Economics, Faculty of Agriculture, Minia University, Egypt.
*Author to whom correspondence should be addressed.
Abstract
This paper estimated the areas of main cereal crops in Egypt (Wheat, Maize, Rice) supply response of farm price, area harvested and net revenue by using Autoregressive Distributed Lag Model (ARDL) methodology to define the integral relationship between the dependent variable and independent variables, both in the long and short-run, in addition to determining the magnitude of the impacts of all dependent variables on the dependent variable, Main findings indicate that farmgate price has a statistically significant impact on wheat, maize and rice cultivated areas. Impact of yield on wheat cultivated area proved insignificant, while proved statistically significant on maize and rice cultivated areas. Impact of net revenue on wheat and maize cultivated areas were significant but was insignificant in case of rice. Applying ARDL bounds test revealed a long-term relationship between all variables in the model for wheat, but not for maize and rice, the study used the data during the period (2000-2017).
Keywords: Autoregressive Distributed Lag (ARDL) Model, supply response, farm price, net revenue.