Online from: 1974
Subject Area: Economics
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|Title:||Agricultural commodity supply response in Ghana|
|Author(s):||Matthew Kofi Ocran, (Graduate School of Business, University of Stellenbosch, Bellville, South Africa), Nicholas Biekpe, (Graduate School of Business, University of Stellenbosch, Bellville, South Africa)|
|Citation:||Matthew Kofi Ocran, Nicholas Biekpe, (2008) "Agricultural commodity supply response in Ghana", Journal of Economic Studies, Vol. 35 Iss: 3, pp.224 - 235|
|Keywords:||Agricultural products, Economic models, Ghana, Prices, Supply|
|Article type:||Research paper|
|DOI:||10.1108/01443580810887788 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
|Acknowledgements:||JEL classification – Q11, Q18This paper was first presented at the African Finance Association's Annual Conference in Ghana in 2006. The authors expresses thanks for constructive suggestions of the anonymous referees and Professor Moshin Bahmani-Oskooee, the editor of the journal. Financial support from the Africagrowth Research in Cape Town, South Africa is also appreciated.|
Purpose – The paper seeks to estimate agricultural commodity supply response at three levels of aggregation namely, all commodities, food commodities and exports commodities.
Design/methodology/approach – The study used cointegration and error correction modelling techniques with the aid of annual data. The aggregate price and quantity indices were constructed using the Tornqvist formula, which has been found more superior to the traditional Laspeyres approach of index construction.
Findings – The producers were responsive to price incentives in the long-run for all three commodity aggregates but in the short-run only producers of export commodities were responsive to price incentives.
Practical implications – Producers respond to price signals as predicted but structural features of the agricultural commodity sector that results in high transaction cost may account for the absence of price response in the short-run. Interventions in lowering transaction cost in agricultural commodity production has the potential of stimulating a faster and considerable response to price incentives.
Originality/value – Despite the policy relevance of agricultural commodity supply response, the extent of the response in Ghana is largely unknown, and it is this gap that the present paper helps to bridge.
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