An Aggregate and Disaggregate Analysis of Acreage Response of some Iranian Agricultural Crops: Wheat, Barley, Potatoes,Sunflower, and Cotton

Considering the importance of increase in production and supply of agricultural products in Iranian economic development, this study was carried out to investigate the impact of factors influencing the acreage (as a proxy for planned production and supply) of five important crops , namely wheat, barley, potatoes, sunflower and cotton. The Seemingly Unrelated Regression Estimation (SURE) was used under the assumptions of partial and complete adjustment, while Theil adjusted R2 was employed to determine the appropriate (disaggregate and aggregate) analytical model. Based on this criterion, aggregate equations are chosen for an analysis of changes in the acreage of the crops. The results show that such factors as product price, previous-year acreage, technological advancement, and gross income risk for the crops have significant effects on changes in the acreage under these crops. Some related policy implications are presented.