Econometrics Model for the Contribution of Kenyan Agricultural Gross Domestic Product to Overall Gross Domestic Product

Musyoki M.; Wawire N.; Ong’ala J.

doi:https://doi.org/10.14445/22315373/IJMTT-V66I6P508

International Journal of Mathematics Trends and Technology

Research Article | Open Access | Download PDF

Volume 66 | Issue 6 | Year 2020 | Article Id. IJMTT-V66I6P508 | DOI : https://doi.org/10.14445/22315373/IJMTT-V66I6P508

Econometrics Model for the Contribution of Kenyan Agricultural Gross Domestic Product to Overall Gross Domestic Product

Musyoki M., Wawire N., Ong’ala J.

Citation :

Musyoki M., Wawire N., Ong’ala J., "Econometrics Model for the Contribution of Kenyan Agricultural Gross Domestic Product to Overall Gross Domestic Product," International Journal of Mathematics Trends and Technology (IJMTT), vol. 66, no. 6, pp. 81-86, 2020. Crossref, https://doi.org/10.14445/22315373/IJMTT-V66I6P508

Abstract

The agriculture sector is the mainstay of the Kenyan economy. The sector contributes directly up to 24% to the national Gross Domestic Product (GDP) and 27% indirectly through linkages with manufacturing, distribution and other related sectors. In this paper, an econometric model relating Kenya’s GDP and Agricultural Gross Domestic Product (AGDP) is developed. Data on Agricultural gross domestic product (quarterly), Gross domestic product (quarterly), Livestock value (annual), Crops value (annual), Fisheries value (quarterly), Purchased inputs value (annual) and Horticulture value (quarterly) collected from 2000-2012 is used for analysis. From the analysis, it was found out that an increase in ln AGDP by 0.1% increases ln GDP by 1.08%. Furthermore, the value of crops, livestock value and purchased inputs are significant in influencing Kenyan GDP in the long-run. Thus, in regard to policy implications, there is need for the government to allocate more resources on the significant variables so as to improve the economy.

Keywords

Agriculture, Econometric Model, Long-run.

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