Impact of trade reform on coffee in Tanzania: A time series Analysis
This study investigates the impact of Tanzania’s trade reforms on coffee export. The study employs a time series analysis from 1970 to 2010. Sources of data are from Food and Agriculture Organization database, Ivan Kushnir's Research Center and World Economic Indicators database. The results suggest that world price, real exchange rate, coffee production in metric tonnes and trade reform (dummy variable) have a greater impact on coffee export earnings in Tanzania. Interestingly, world price and coffee production have most significant impacts on coffee export earnings both in long run and short run. However, real exchange rate and dummy variable have positive impacts on coffee export earnings but statistically insignificant. Error correction term found with the expected sign and quickly adjusted to the long run equilibrium at the speed of 98.2 percent per annum. Trend analysis reveals that trade reform has a positive impact on coffee.