An Investigation into Change in Agricultural and Industrial Products Output-price Relationships Drawing from Nepalese Experience

Abstract

Purpose: This research article explored the relationship between change in output and domestic price of both agricultural and industrial products and the variability or consistency of the annual growth rate of change in price and output of both agricultural and industrial sectors of Nepal. Objectives: The research aimed to establish the relationship between change in the price of agricultural products and change in the price of industrial products in Nepal. Methods: The study applied descriptive and analytical approaches to measure the relationship or correlation between changes in output and prices of products in the agricultural and industrial sectors. The parameters were analysed by comparing the standard deviation and coefficient of variation. The relation of agricultural and industrial product output with price is established by using a simple correlation analysis. Limitations: Based on secondary data collected from various economic surveys of Nepal covering 17 years from fiscal year 2002/03 to 2018/19. It measured the relationship between the annual change in price and output of agricultural and industrial production using simple statistical tools like mean, standard deviation, and correlation. Results: It was found that there is a moderate positive correlation between the change in price of agricultural and industrial products. Similarly, there is a low degree negative correlation between change in output and price in both the agricultural and industrial sectors. Implications: There was a positive relationship between the price of agricultural products and industrial products. Therefore, it is necessary to give high priority to the development of the agricultural sector. Industrial development is impossible without the development of the agricultural sector because they are interdependent with each other. The agricultural sector and industrial sector are uplifted simultaneously. There was a low degree negative correlation between price and output of the product of both the agricultural and industrial sectors. Therefore, output increasing activities must be performed by private and public sectors.