Factors that Impact the Market of Agricultural Tractors in Mexico

Abstract

Objective: To determine the main factors that impact the market of agricultural tractors in Mexico.
Design/Methodology/Approach: Time series data from 2000 to 2020 were used to estimate two nationalscale models for agricultural tractors: one for supply and the other for demand.
Results: The results suggest that, in the long run, the supply and demand for agricultural tractors have an inelastic responsiveness to price changes, with a 0.079 and -0.083 elasticity, respectively.
Study Limitations/Implications: The main limitation is the lack of official data on the historical prices, sales, and production of tractor units in recent years. Consequently, estimates must be employed.
Findings/Conclusions: In addition to the price factor, producer income and interest rate affect demand, with elasticities of 0.178 and -0.002, respectively. Consequently, the government should implement the necessary measures, such as improving income and maintaining low interest rates, to encourage the demand for tractors in Mexico.