Determination of the Period of Yield of Investment in Agricultural Sector in Iran

Mehregan, Nader; Faraji, Ebrahim

doi:10.22059/ijaedr.2013.50237

Determination of the Period of Yield of Investment in Agricultural Sector in Iran

Document Type : Research Paper

Authors

Nader Mehregan ¹
Ebrahim Faraji ²

¹ Associate Professor, Faculty of Social Sciences and Economics, Buali University, University of Hamedan, Hamedan, Iran

² MSc. Student, Faculty of Social Sciences and Economics, Buali University, University of Hamedan, Hamedan, Iran

10.22059/ijaedr.2013.50237

Abstract

Among investments in different sections of economy, investment in agriculture is great importance. In addition to increasing production and job opportunities in agriculture, investment in this section will help to increase these in other sections as well, due to back and front relations with other economic activities. Due to the fact that investment does not yield rapidly, and it takes some time to show its main impacts, in this article we aim to recognize the investment behaviour in agriculture section during its period of yield. Almon Distributed Lag method is applied to measure the short, medium and long yields of investment time in Iranian agricultural sector. This paper, tries to determine how long investment leads to its yield average in Iranian Agricultural sector. Results indicate that the average yield of investment is 6 years and the immediate yield of investment in agriculture is negative. This period follows a 2nd degree function: during the first four years the yield has an increasing trend after the maximum yield rate occurs, then yield is decreasing trend that lasts till the 6th year. One dollar increase in investment in agriculture sector, results in more than 12 dollar increase in value added of agriculture sector in a 6-year period. Also in average the amount of efficacy of agricultural sector is higher than those of the whole country and non-oil sector.

Keywords