Impact of the common agricultural policy on the long-run relationship between world and domestic price of Banana and Cocoa in the Philippines.

Date

4-2009

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

U-Primo E. Rodriguez

Abstract

The study examined the impact of the European Union’s Common Agricultural Policy (CAP) on the long-run relationship between world and domestic price of banana and cocoa in the Philippines. The Engle-Granger (EG) approach of the co-integration test was done to determine the relationship. After determining that prices of banana and cocoa are co-integrated, structural break was included in the test to address the depressing effect of the policy’s export subsidy on world price of agricultural commodities. The test included three models which allowed for changes in the intercept and the slope, as well as a time trend. After estimating the co-integrating equations for these three models, it was concluded that the model which allows for a change in the intercept best describes the impact of structural break on the long-run relationship between prices of cocoa. The model suggested that, in 1982, there was a fundamental change in the parameters of the co-integrating relationship between world and domestic prices of cocoa.

Language

English

Location

UPLB College of Economics and Management

Call Number

LG 993.5 2009 E2 T83

Document Type

Thesis

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