Hectarage Response to Price and Yield for Sugarcane in Kenya - An Econometric Study

Abstract

This study identifies the factors responsible for hectarage allocation to sugarcane in Kenya and estimates the short-nin and long-run elasticities of sugarcane hectarage with respect to some exogenous variables. Time series data that covered the period of 1962-1992 were used for the study. The analysis was performed using Nerlove‘s Partial Ad- justment Model. The results of the study indicate that the significant variables influencing sugarcane hectarage are cane and maize producer prices and yield of cane. The short-run elasticity was highest for the producer price of cane with respect to sugarcane hectarages which was estimated to be 0.45. Also, the results of the study showed that only l9 percent of the desired change was as a result of changes in the exogenous variables.