Palm Oil Case Study

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Objective (vii) seek to describe a model of the Nigerian palm oil market to enable us determine the macroeconomics factors that affect the output of the palm oil industry in Nigeria. Five variables were examined; these are areas, yields, domestic consumption, export and import. (a) Area Table 4.25: Estimated 2SLS Regression of Total Area Equation under palm oil in Nigeria (1970-2013). Number of obs = 43 Wald chi2(2) = 56.49 Prob> chi2 = 0.0000 R-squared = 0.6582 Root MSE = 2.2e+06 ARPL Coef. Std. Err. z P>|z| [95% Conf. Interval] RNGNPPO 39.05154** 15.45038 2.53 0.011 8.769362 69.33373 RNGNPSO 48.79536* 14.23603 3.43 0.001 20.89325 76.69746 _cons -4760161* 1183078 -4.02 0.000 -7078950 -2441371 NB* indicates significance at 1% **indicates significance at 5% The R2 value of 0.6582 means approximately 65.82% of the variation in palm oil area planted over the study period is explained by the combine effect of expected real Nigerian price of palm oil (RNGNPPO) and expected real Nigerian price of soybean (RNGNPSO) . The Wald statistics follows' the chi - square statistic with degree of freedom equal to the number of regressors estimate. The chi square value is about 57 and the probability…show more content…
The result further indicates that 1% increase in yield lagged one year, current yield will increase by 0.6023%. Also a 1% increase in expected real Nigerian price of palm oil lag one (RNGNPPOt-1) will decrease yield by -4.10e-06. However for time which measures technological change a 1% increase will cause a 0.048% in yield of palm

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