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Supply Response in the Northeastern Fresh Tomato Market: Cointegration and Error Correction Analysis

Published online by Cambridge University Press:  15 September 2016

Ananda Weliwita
Affiliation:
Center for Agricultural and Rural Development, Iowa State University
Ramu Govindasamy
Affiliation:
Department of Agricultural Economics and Marketing at Rutgers University
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Abstract

This paper reexamines supply response in the Northeastern fresh tomato market during the 1949–94 period by employing cointegration and error correction technique. It tests whether there has been a long-run equilibrium relationship between Northeastern production and a set of price and nonprice factors that influence it. Findings suggest that wage rate, imports from competing regions, and urban pressure have had significant negative impacts on regional production. The negative relationship between price and production may have resulted from the strong negative effects exerted by the nonprice factors.

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Copyright
Copyright © 1997 Northeastern Agricultural and Resource Economics Association 

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