Cointegration, Producer Support Estimate, General Services Support
Objective: To analyze the long-term relationship of two groups of agricultural policy instruments classified
by the OECD-Producer Support Estimator (PSE) and General Services Support Estimator (GSSE)-OECD
classification on Agricultural Gross Domestic Product (AGDP) in Mexico, USA, Canada, Chile and Brazil
during the period 1995-2020, to generate information that contributes to the design of agricultural policies.
Design/Methodology/Approach: The information used in this work was developed by the OECD and was
integrated into a time series for the 1995-2020 period. A quantitative analysis was carried out based on the
econometric method, applying the cointegration test.
Results: The Canadian, Brazilian, and Mexican series are cointegrated, because the error of the model has a
unit root (i.e., individual variables are not of order I(0)); however, the combination of their variables show that
the error is a process I(0), with a zero mean. However, the Chilean and USA variables were not cointegrated.
Study Limitations/Implications: An open market environment requires the development and implementation
of policies that include the use of diverse and relevant instrument groups, guaranteeing that the resources
transferred to the sector generate the expected results.
Findings/Conclusions: In comparison with the PSE, the GSSE has a closer long-term relation with the
growth of the agricultural GPB in most countries; therefore, using this group of instruments to transfer
resources to the sector is assumed to improve its performance to a greater degree.