Working Paper
Price Incentives, Non-Price Factors, and Agricultural Production in Sub-Saharan Africa: A Cointegration Analysis
This paper deals with the question of how responsive farmers in Sub-Saharan Africa (SSA) are to changes in incentives. Employing Johansen's multivariate cointegration approach, it investigates for ten selected SSA countries the long-run effect of pricing policies, macroeconomic distortions, and certain non-price factors on agricultural production. It turns out that - in those cases where cointegration relationships are found-estimated supply elasticities tend to lie between 0.20 and 0.50. Among the non-price factors, drought episodes have significantly impaired agricultural growth in six out of ten sample countries.
Key Words
- agricultural supply response
- cointegration
- sub-Saharan Africa