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Abstract
This paper uses data that spans different pricing regimes to estimate the aggregate
agricultural supply response to price and non-price factors in Zimbabwe. The
autoregressive distributed lag (ARDL) approach to cointegration employed here gives
consistent estimates of supply response in the presence of regressor endogeneity and also
permits the estimation of distinct estimates of both long-run and short-run elasticities
when exogenous variables are not integrated of the same order. The results confirm that
agricultural prices in Zimbabwe are endogenous and the exogenous variables are not
integrated of the same order hence use of the autoregressive distributed lag approach was
worthwhile. The paper finds a long-run price elasticity of 0.18, confirming findings in the
literature that aggregate agricultural supply response to price is inelastic. This result
means that the agricultural price policy is a somewhat blunt instrument for effecting
growth in aggregate agricultural supply. The provision of non-price incentives must play
a key role in reviving the agricultural sector in Zimbabwe.