Agricultural Economics Mid Term Progress Submission
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The document discusses using an econometric technique from Bai and Perron (2003) to endogenously identify structural breaks in time series data for India's agricultural sector since independence. The objective is to determine if different crops experienced significant changes in productivity trends at different times, rather than assuming uniform break points. Yield data for 26 major crops from 1950-present will be analyzed to identify break points for individual crops using the Bai Perron technique. This will provide a more granular understanding of agricultural performance than prior studies based on aggregate GDP growth.
Agricultural Economics Mid Term Progress Submission
- 1. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary A Search for Structural Breaks in Agriculture Economy since Independence Mid Term Progress Anirudh Jayaraman 1 1M.Sc Economics Indira Gandhi Institute of Development Research October 14, 2016
- 2. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Outline 1 Exploring for Breakpoints Objective Motivation 2 Data and Methodology Bai and Perron (2003) Technique Data 3 Summary
- 3. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Outline 1 Exploring for Breakpoints Objective Motivation 2 Data and Methodology Bai and Perron (2003) Technique Data 3 Summary
- 4. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Objective Has the Agricultural Sector undergone any signi鍖cant structural changes since Independence?
- 5. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Objective Has the Agricultural Sector undergone any signi鍖cant structural changes since Independence? After 91 reforms?
- 6. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Objective Has the Agricultural Sector undergone any signi鍖cant structural changes since Independence? After 91 reforms? Need to search for crucial turning points in agricultural productivity...
- 7. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Objective Has the Agricultural Sector undergone any signi鍖cant structural changes since Independence? After 91 reforms? Need to search for crucial turning points in agricultural productivity... CROP WISE.
- 8. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Objective Has the Agricultural Sector undergone any signi鍖cant structural changes since Independence? After 91 reforms? Need to search for crucial turning points in agricultural productivity... CROP WISE. The results may be useful for understanding performance trends for di鍖erent crops.
- 9. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Objective Has the Agricultural Sector undergone any signi鍖cant structural changes since Independence? After 91 reforms? Need to search for crucial turning points in agricultural productivity... CROP WISE. The results may be useful for understanding performance trends for di鍖erent crops. This may help in identifying crops that might have have been responsible for acceleration / deceleration in performance.
- 10. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Outline 1 Exploring for Breakpoints Objective Motivation 2 Data and Methodology Bai and Perron (2003) Technique Data 3 Summary
- 11. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Issues and Motivation Researchers often end up choosing sub-periods exogenously on the basis of prior information about timing of signi鍖cant changes.
- 12. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Issues and Motivation Researchers often end up choosing sub-periods exogenously on the basis of prior information about timing of signi鍖cant changes. These turning points are often considered uniformly across states, agro-climatic zones and crops.
- 13. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Issues and Motivation Researchers often end up choosing sub-periods exogenously on the basis of prior information about timing of signi鍖cant changes. These turning points are often considered uniformly across states, agro-climatic zones and crops. It may be possible that di鍖erent crops underwent signi鍖cant structural changes in di鍖erent years.
- 14. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Issues and Motivation Researchers often end up choosing sub-periods exogenously on the basis of prior information about timing of signi鍖cant changes. These turning points are often considered uniformly across states, agro-climatic zones and crops. It may be possible that di鍖erent crops underwent signi鍖cant structural changes in di鍖erent years. Break dates may also end up changing with more recent data becoming available.
- 15. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Issues and Motivation Researchers often end up choosing sub-periods exogenously on the basis of prior information about timing of signi鍖cant changes. These turning points are often considered uniformly across states, agro-climatic zones and crops. It may be possible that di鍖erent crops underwent signi鍖cant structural changes in di鍖erent years. Break dates may also end up changing with more recent data becoming available. A relatively recent econometric technique from Bai and Perron (2003) allows us to dynamically learn break dates from the data.
- 16. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Issues and Motivation Researchers often end up choosing sub-periods exogenously on the basis of prior information about timing of signi鍖cant changes. These turning points are often considered uniformly across states, agro-climatic zones and crops. It may be possible that di鍖erent crops underwent signi鍖cant structural changes in di鍖erent years. Break dates may also end up changing with more recent data becoming available. A relatively recent econometric technique from Bai and Perron (2003) allows us to dynamically learn break dates from the data. The strucchange package in R uses a procedure outlined by Zeileis et al (2005) for this purpose.
- 17. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Outline 1 Exploring for Breakpoints Objective Motivation 2 Data and Methodology Bai and Perron (2003) Technique Data 3 Summary
- 18. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Bai and Perron (2003) This procedure is concerned with testing deviations from stability in the classical linear regression model yi = xT i 硫 + ui
- 19. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Bai and Perron (2003) This procedure is concerned with testing deviations from stability in the classical linear regression model yi = xT i 硫 + ui Assume m breakpoints with the coe鍖cients shifting from one stable regression relationship to another. Thus there are m + 1 segments in which the regression coe鍖cients are constant.
- 20. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Bai and Perron (2003) This procedure is concerned with testing deviations from stability in the classical linear regression model yi = xT i 硫 + ui Assume m breakpoints with the coe鍖cients shifting from one stable regression relationship to another. Thus there are m + 1 segments in which the regression coe鍖cients are constant. The algorithm for computing the optimal breakpoints given the number of breaks is based on a dynamic programming approach. The underlying idea is that of the Bellman principle.
- 21. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Bai and Perron (2003) This procedure is concerned with testing deviations from stability in the classical linear regression model yi = xT i 硫 + ui Assume m breakpoints with the coe鍖cients shifting from one stable regression relationship to another. Thus there are m + 1 segments in which the regression coe鍖cients are constant. The algorithm for computing the optimal breakpoints given the number of breaks is based on a dynamic programming approach. The underlying idea is that of the Bellman principle. Underlying Model (m breakpoints) yi = xT i 硫j + ui (i = ij1 + 1; j = 1,...,m+1)
- 22. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Outline 1 Exploring for Breakpoints Objective Motivation 2 Data and Methodology Bai and Perron (2003) Technique Data 3 Summary
- 23. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Data The data has been obtained from Data Bank on Agriculture and Allied Sectors in the Planning Commission website and is sourced from Directorate of Economics and Statistics (DES) and Ministry of Agriculture.
- 24. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary Data The data has been obtained from Data Bank on Agriculture and Allied Sectors in the Planning Commission website and is sourced from Directorate of Economics and Statistics (DES) and Ministry of Agriculture. Yield data of principal crops (All-India) since 1950. These are some 26 crops including rice, wheat, jowar, bajra, maize, pulses (disaggregated), cotton, sugarcane, jute, etc.
- 25. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary To conclude... Intend to explore for breaks endogenously in agricultural time series data.
- 26. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary To conclude... Intend to explore for breaks endogenously in agricultural time series data. Studies on structural breaks in growth rates of agricultural GDP may not be the be-all and end-all.
- 27. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary To conclude... Intend to explore for breaks endogenously in agricultural time series data. Studies on structural breaks in growth rates of agricultural GDP may not be the be-all and end-all. look at breaks in yields of principal crops for more granular level detail.
- 28. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary To conclude... Intend to explore for breaks endogenously in agricultural time series data. Studies on structural breaks in growth rates of agricultural GDP may not be the be-all and end-all. look at breaks in yields of principal crops for more granular level detail. Will apply Bai Perron (2003) technique to dynamically 鍖nd break points for individual crops.
- 29. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary To conclude... Intend to explore for breaks endogenously in agricultural time series data. Studies on structural breaks in growth rates of agricultural GDP may not be the be-all and end-all. look at breaks in yields of principal crops for more granular level detail. Will apply Bai Perron (2003) technique to dynamically 鍖nd break points for individual crops. Outlook Based on break-dates, one can build further hypotheses as to what might have caused those breaks.
- 30. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Exploring for Breakpoints Objective Motivation Data and Methodology Bai and Perron (2003) Technique Data Summary To conclude... Intend to explore for breaks endogenously in agricultural time series data. Studies on structural breaks in growth rates of agricultural GDP may not be the be-all and end-all. look at breaks in yields of principal crops for more granular level detail. Will apply Bai Perron (2003) technique to dynamically 鍖nd break points for individual crops. Outlook Based on break-dates, one can build further hypotheses as to what might have caused those breaks. It would be interesting to see whether the sub-periods are anything of the kind Ramesh Chand (2012) obtains for Agriculture GDP growth rate.
- 31. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Appendix For Further Reading References I R. Chand. Temporal and Spatial Variations in Agricultural Growth and Its Determinants. Economic and Political Weekly, vol XLVII No.s 26 27:5564, 2012. Jushan Bai and Pierre Perron Computation and Analysis of Multiple Structural Change Models. Journal of Applied Econometrics, 18:122, 2003. Madhusudan Ghosh. Structural Breaks and Performance in Indian Agriculture. Indian Journal of Agricultural Economics, 65(1):121, 2010.
- 32. A Search for Structural Breaks in Agriculture Economy since Independence Anirudh Jayaraman Appendix For Further Reading References II Zeileis et al. strucchange: An R Package for Testing for Structural Change in Linear Regression Models. CRAN Project, 2005. Oehmke and Schimmelpfenning. Quantifying Structural Change in US Agriculture: The Case of Research and Productivity. Journal of Productivity Analysis, 21:297315, 2010.