Time Series Econometric Estimation of Supply Equation for Malaysian Rice Sector
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Keywords

Rice production seasons, estimated coefficients, policy analysis

How to Cite

Suleiman , U. H., Abdullah, A. M. ., Shamsudin , M. N., & Mohamed, Z. A. (2014). Time Series Econometric Estimation of Supply Equation for Malaysian Rice Sector. Asian Journal of Empirical Research, 4(9), 455–467. Retrieved from https://archive.aessweb.com/index.php/5004/article/view/3812

Abstract

Rice production in the country is characterized by two production seasons namely, main- season and off-season. Officially, the two production seasons data usually aggregated to form single data of domestic rice supply for the nation. This aggregation is refers to as all-season rice production. All the previous studies estimated supply equation based on the aggregated data thereby denying the opportunity of having a comprehensive insight into the structural relationship exist in the off-and-main season’s rice production necessary for holistic policy analysis and decision. Hence, this study attempted estimating supply equation by disaggregation into main-season, off-season, and all-seasons’ rice production equations. Time series data (1980-2012) were collected and analyzed using both co-integration and non-co-integration approaches. For valid inference, estimated coefficients were subjected to autocorrelation, heteroskedasticity, misspefication and structural stability diagnostic-tests. The results show that estimated coefficients for main-season and off-season paddy production equations exhibited common characteristics in terms of economic and statistical properties. Therefore, the estimated coefficients for all-season paddy production, which represents the aggregate information of main and off- season’s paddy production, could still be adopted to explain relationship in supply side of the rice sector.

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