The Impact of Division-Level Production Outcomes upon Punjab Aggregate Wheat Production: An Application of Correlated Component Regression Approach

Abstract

This study analyzes the relative importance of division-level production outcomes in predicting the Punjab outcome for wheat crops using the annual time-series data from 1982 to 2020. A newly developed regression analytic approach, called correlated component regression (CCR), was applied to overcome suppression effects and multicollinearity data problems. Standardized regression coefficients have been used to determine the relative importance of each division. Herfindahl-Hirschman Index (HHI) was applied to measure the geographic concentration of the division-level impacts. The empirical analysis was applied at two time periods in which the first period includes the crop years from 1987 to 2003 and the second period covers 2004 to 2020 crop years. The regression results provide an HHI value of 1175 during 1987-2003 and 1351 during 2004-2020. A smaller value of HHI during the period 1987-2003 suggests that the technological change along with high-yield varieties, use of fertilizers, and pesticides have led to a greater concentration for wheat in this period, and the opposite was true for the 2004-2020-time period.