Study and Comparison of the Importance of Oil Products and Electricity with other Production Factors in Iran Agricultural Sector

Subject Areas : Agricultural Economics Research

E. Fallahi ¹ (Agricultural Economics Graduate , Tarbiat Modares University)
S. Khalilyan ² (دانشیار اقتصاد کشاورزی دانشگاه تربیت مدرس)

Received: 2015-12-27 Accepted : 2015-12-27 Published : 2009-06-22

Keywords: Iran, Production Function, Agriculture, energy carriers, ARDL Approach, Electricity, Oil Products,

Abstract :

In this study, Auto Regressive Distributed Lag (ARDL) approach has been used to estimate the importance of oil products and electricity with other factors in production of agricultural products. The results of this research indicate that the estimated long-run coefficients for the factors of labor, capital, oil products, and electricity have been significant and equal to 0.29, 0.11, 0.06, and 0.45 respectively, which indicated positive role of mentioned factors including oil products and electricity in agricultural production over the study period (1967-2004). Also the coefficients of mentioned factors were equal to 0.029, 0.12, 0.098, and 1.63 respectively. The comparison of the estimated long-run coefficient and also the standardized coefficient of electricity factor with the corresponding amounts of oil products showed importance of electricity factor in production of agricultural products. Therefore, use of electricity instead of oil products, besides reduction in consumption of oil products, could lead to reduction in pollution. Comparison of short-run with longrun coefficients showed that although the effect of factors including oil products and electricity on production were considerable in the long-run. Finally, the coefficient of error correction component showed that 7 percent of the disequilibrium error of former period is adjusted in succeeding period. This leads to the conclusion that adjustment speed is low in agricultural sector. 

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