The Analysis of the Relation between Production and Price in Sunflower by Koyck Model

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Purpose: it is aimed to explain the relationship between sunflower production and price in Turkey with the Koyck model. Design/Methodology/Approach: Distributed Lagged Koyck Model was applied to reveal the relationship between sunflower production and price. At this stage, data for the period 2000-2020 (21 years) were used. A model was developed by Koyck in order to eliminate drawbacks in distributed lag models. Based on the assumption that the independent variable lags affect the dependent variable with a certain weight and that the lag weights decrease geometrically in the Koyck model, the regression equation is estimated by making the model reduced. Findings: The 10% increase in the sunflower price in the current year is expected to increase the production amount one year later by 2.06% and the production amount two years later by 1.22%. The results show that the change in the lagged values of prices has a positive effect on production and this effect is gradually decreasing. Originality/Value: Sunflower production is also affected by the lagged value of the average price in the market. The Koyck model is a suitable model to reveal these lagged values. Thanks to this model, which is used to measure the lagged effects of the price variable in successive periods in terms of production, it will be able to shed light on the effective policies that can be applied for sunflower production.