4.2 Unit Root Test Results
Unit root tests using the Augmented Dickey-Fuller test were conducted for all variables except of the sales quota dummy and time trend variables. As shown in Table 2, lagged price for maize
(lnPM
t-1
), population of tobacco farmers (lnATG
t
) and lagged tobacco prices (lnPT
t-1
) were found stationary in levels that is were I. Total tobacco output (lnTOUT
t
) and lagged tobacco output (lnTTOUT
t-1
) were stationary after first differencing that is they were I.
Table 2: Results for unit root test at level
Variable
ADF test statistic Critical value at 1% Critical value at 5% Critical value at 10% Decision
-0.63
-1.95
-1.61 not stationary ln(TOUT
t-1
) 0.33
-2.63
-1.95
-1.61 not stationary ln(PT
t-1
)
-2.95**
-3.63
-2.95
-2.61 I) ln(PM
t-1
)
-5.49*
-4.25
-3.54
-3.21 I) ln(ATG
t
)
-3.31*
-4.24
-3.54
-3.20 Ii means stationary at 1 % (5 %) [10 %] level, I(.) means order of integration
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