Case Study: ARL Bounds Test For Co-Integration

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Table 3: ARDL Bounds Test for Co-integration
Co-integration tests Bound testing for co-integration Diagnostic tests
Models FStatistics Lag R2 DW test 7.3806*** 2,2,2,2,1,1 0.99994 1.9644 5.4298** 2,0,2,0,1,1 0.99503 1.9805 5.4930** 0,0,2,1,2,2 0.98491 2.1880 6.5027*** 2,2,2,2,1,1 0.99994 1.9592 8.0358*** 1,1,2,0,1,1 0.99732 2.0646 4.2303* 1,2,0,0,0,0 0.96578 2.2186 Critical value
Significance level Lower bounds (0) Upper bounds (1)
1% level 4.030 5.598
5% level 2.922 4.268
10% level 2.458 3.647
The critical value according to Narayan (2005) (Case III: Unrestricted intercept and on trend) No trend, K = 5, (***), (**), (*) denotes Significant at 1%, 5% and 10% respectively.

Table 3, represents the long-run co-integration test
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Table 5 shows the estimated ARDL error correction approach. The results illustrate most of the variables in this model as either statistically significant or not significant at any level with an expected sign. Specifically, food production (dLFD) and annual population growth rate (dLPOP) are positive and significant at 1% and 5% level of significant respectively. For instance, improvement in the in food production and annual population growth rate in the short-run are related to improvement in Cereal Production. As can be seen from the results. Food production has an immediate impact on cereal production in Nigeria. So, with this analysis, it can be stated that food production can foster growth of the cereal production and that its effects seem to be quite lasting over time, although the magnitude is rather small. As a consequence, population growth displays a prolonged impact on the agricultural productivity in the short-run. However, this finding agrees with the Malthusiantheory which states that population increase at a faster rate it stimulates urgent demand for food and increases output. To be exact, improvement of food production by 1% leads to increase in Cereal production by 10.07%. This findings consistent with the finding by Battisti&

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