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Research Article
Department of Economics, COMSATS University, Islamabad, Pakistan; 2Pir Mehr Ali Shah, Arid Agriculture University
1
The cointegrating regression form of an ARDL model Descriptive statistics and unit root testing
is obtained by transforming (1) into differences and Table 1 describes the descriptive statistics of all the
substituting the long-run coefficients from (2): variables of the study.Before estimation,we have applied
unit root test i.e. Augmented Dickey Fuller (ADF)
Table 1: Descriptive statistics.
Area Production Fertilizer use Rainfall Max temp Min temp Technology
Mean 2768.2 9804.8 591.6 36.5 36.7 23.5 28718.8
Minimum 2108 2908 172.5 15.1 35.3 22.7 1529
Maximum 3193 14265 1090 80.4 37.7 24.5 71607
St. deviation 300.7 2942.9 303.3 13.6 0.50 0.21 19269.4
to check the stationarity of variables. In ADF, null co-integration is accepted at 1% level of significance.
hypothesis is that of the existence of unit root. If Thus, results confirmed presence of long run co-
ADF statistics are lower than critical value, the null integration.
hypothesis is accepted. ADF results shown in Table -.72
2 depicts that rain fall, technology, min and max
temperature do not have a unit root. In turn, unit root is -.74
test. This test shows all factors being in harmony with -.82
increase cotton production. Area also has positive Figure 2: CUSUM test.
impact on cotton production. One percent increase 1.6
in area for cotton cultivation will increase cotton
productivity by 0.537 percent. However, this result is 1.2
and negative (results not reported). In the short CUSUM of Squares 5% Significance
run, fertilizer, rainfall and maximum temperature Figure 3: SUSUMQ test.
showed significant effect on cotton production while
minimum temperature didn’t show any significant Cumulative sum and cumulative sum of squares
negative influence with regard to cotton production. After development of long-run relationships, these
criterions are functioned to check the consistency of
March 2020 | Volume 36 | Issue 1 | Page 338
Sarhad Journal of Agriculture
the model (Brown et al., 1975). The model is steady Author’s Contribution
if the plot of cumulative sum and cumulative sum of
square stays within the 5% critical bands. Figures 2 MR contributed to concept and design. ZH wrote lit-
and 3 provide the results of CUSUM and CUSUMQ erature review. US wrote first draft and did database
test, respectively. It shows that model under study is handling. MZ did analysis. MIH wrote result section.
stable. MU revised the manuscript and NK wrote introduc-
tion section of manuscript.
Conclusions and Recommendations
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