Econometric Analysis of Potato Production and Pricing Dynamics in Bangladesh: An Application of Distributed Lag Model
Md. Humaun Kabir & Md. Firoz HossainIslamic University, Kushtia, Bangladesh.
Email: hkabirecoiu86@gmail.com
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Purpose: This study investigates the dynamics of potato production and pricing in
Bangladesh over the period 1990–2023.
Methodology: The experiment was carried out by using time series data from
Bangladesh Bureau of Statistics (BBS) and FAOSTAT for the empirical analysis.
The Koyck distributed lag model is applied to evaluate short-run and long-run
effects of pricing on production.
Findings: The findings reveal that the potato production in Bangladesh has been
influenced by the lag value of average price formed in the market. The most
striking result of the study is the time required for the changes in the potato price
in Bangladesh to an effect on potato production of 13.29 years.
Practical Implications: This result indicates that farmers are highly motivated to
cultivate this crop, which is primarily grown as a staple. To mitigate price
volatility and uncertainty in the potato market, it is essential to promote
sustainable potato farming practices and establish an efficient market
organization.
Originality/Value: This study adds to the current literature by examining potato
production patterns in Bangladesh through an econometric analysis, specifically
the Koyck distributed lag model.
Limitations: The study's limitations include the absence of non-price elements
including climate change, input prices, and government regulations that also affect
output, as well as data limitations that could compromise the accuracy of
long-term lag estimations.
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