3.2. Definition and Justification of Variables
3.2.1 The Dependent Variable
Total tobacco output (lnTOUTt) Total tobacco output refers to the actual total amount of all unprocessed tobacco leaf in million tonnes supplied and delivered to the market. There is a great disagreement in existing literature on the correct measure of crop supply response and the available options are acreage, productivity and total output. Askari and Cummings (1977) stated that agricultural supply response functions are best expressed in terms of acreage assuming that farmers can only increase output in response to price changes by utilising more land. However, Leaver (2004) argued that use of actual output is also a best measure because this acknowledges that farmers may respond to changes in prices by farming their land more intensively. Therefore, from the above argument and also guided by empirical literature, this study used total output as the dependent variable.
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