The Impacts of Agricultural Price Policy on Cocoa Supply in Ghana: An Error Model

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Periodical article

Title:	The Impacts of Agricultural Price Policy on Cocoa Supply in Ghana: An Error Model
Authors:	Abdulai, Awudu Rieder, Peter
Year:	1995
Periodical:	Journal of African Economies
Volume:	4
Issue:	3
Period:	December
Pages:	315-335
Language:	English
Geographic term:	Ghana
Subjects:	prices cocoa price policy Economics and Trade Agriculture, Natural Resources and the Environment
External link:	https://jae.oxfordjournals.org/content/4/3/315.full.pdf
Abstract:	This paper presents an empirical investigation of the supply of cocoa in Ghana. The analysis was done for the 1960-1989 period. The error correction model, which avoids the familiar partial adjustment model's unrealistic assumption of a fixed target supply based on stationary expectation, is used in the analysis. The model provides good empirical results, and is preferred in specification tests to the partial adjustment model. The results reveal that cocoa supply is significantly influenced by the real producer price of cocoa, real price of maize, the supply of manufactured goods and the real exchange rate. The supply of cocoa was found to be inelastic both in the short and long runs. However, the elasticities obtained in the study suggest that supply of cocoa is more responsive in a shorter time than thought previously. Bibliogr., notes, ref., sum.