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

Authors

• E. Fallahi
• S. Khalilyan

Agricultural Economics Graduate , Tarbiat Modares University

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. 

Keywords

• Agriculture
• ARDL Approach
• Electricity
• energy carriers
• Iran
• Oil Products
• Production Function

20.1001.1.20086407.1388.1.2.1.8

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