Effect of Land Allocation on Agricultural Productivity in Nigeria Using ARDL Approach to Cointegration

Abstract

To test the validity of the inverse relationship between land productivity and land size within the context of Nigeria, this study employed the use of Autoregressive Distributed Lag (ARDL) model to test for the presence of long-run relationship between the two variables using data from 1980 to 2017 sourced from the Food and Agriculture Organisation. Prior to the test for cointegration, the Modified Granger Causality of the Toda and Yamamoto (1995) was used to test for the causality to be sure that causality indeed runs from land size to land productivity. The Granger Causality confirmed that land size Granger-cause land productivity. Given this result, the semi-log ARDL model was estimated to test for cointegration and also estimate the elasticity of the relationship in both the short and long runs. The result showed that while land size has inverse relationship with land productivity in both the short and long run, its influence in determining yield was only significant in the short run. The Error Correction Term, ECT(−1) which is the speed of adjustment of short-run disequilibrium to long-run steady state was both negative and significant, implying that there is going to be convergence to long-run equilibrium at the speed of about 24%.