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Cointegration analysis for rice production in the states of Perlis and Johor, Malaysia


Shitan, Mahendran and Ng, Yung Lerd and Karmokar, Provash Kumar (2014) Cointegration analysis for rice production in the states of Perlis and Johor, Malaysia. In: 2nd ISM International Statistical Conference 2014 (ISM-II), 12-14 Aug. 2014, MS Garden Hotel, Kuantan, Pahang. (pp. 206-211).


Rice is ranked the third most important crop in Malaysia after rubber and palm oil in terms of production. Unlike the industrial crops, although its contribution to Malaysia’s economy is minimal, it plays a pivotal role in the country’s food security as rice is consumed by almost everyone in Malaysia. Rice production is influenced by factors such as geographical location, temperature, rainfall, soil fertility, farming practices, etc. and hence the productivity of rice may differ in different state. In this study, our particular interest is to investigate the interrelationship between the rice production of Perlis and Johor. Data collected from Department of Agriculture, Government of Malaysia are tested for unit roots by Augmented Dickey-Fuller (ADF) unit root test while Engle-Granger (EG) procedure is used in the cointegration analysis. Our study shows that cointegrating relationship exists among the rice production in both states. The speed of adjustment coefficient of the error correction model (ECM) of Perlis is 0.611 indicating that approximately 61.1% of any deviation from the long-run path is corrected within a year by the production of rice in Johor.

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Additional Metadata

Item Type: Conference or Workshop Item (Paper)
Divisions: Institute for Mathematical Research
DOI Number: https://doi.org/10.1063/1.4907446
Publisher: AIP Publishing LLC
Keywords: Rice production; Unit root; Long-run; Cointegration; Error correction; Speed of adjustment
Depositing User: Nabilah Mustapa
Date Deposited: 27 Sep 2017 10:52
Last Modified: 27 Sep 2017 10:52
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.1063/1.4907446
URI: http://psasir.upm.edu.my/id/eprint/57436
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