The Ife Center for Psychological Studies (I.C.P.S.)
Abstract
This study examined the effects of crude oil price on agricultural productivity in Nigeria between 1981 and 2010. Agricultural productivity (proxy as agricultural GDP) was specified as a function of factors such as exchange rate, crude oil price, capital stock, labour, land and fertilizer. Quantitative estimates, based on Augmented-Dickey Fuller (ADF) unit root test, Co-integration and Error Correction modelling, indicate that the exchange rate, capital, labour and trend are the major determinants of agricultural productivity in the long-run, while price of crude oil price is the most important determinant of agricultural productivity in the short–run. The results further show that the error correction mechanism (ECM) indicated a feedback of about 112.5% of the previous year’s disequilibrium from long-run domestic agricultural production.Keywords: Agricultural productivity, crude oil price, error correction, co-integration
