The Demand for Fertilizer: A Critical Review

Khalil A. Hamdani, Nadeem Ul Haque


Four studies [2, 3, 7, and 11] and a comment [1] on the demand
for fertilizer have appeared in this Review: All fit similar demand
specifications to aggregate data for roughly the same time period.
Surprisingly, each presents distinctly different results. Together, the
studies provide 28 estimates of the price elasticity of fertilizer
demand of which only seven are significant and even these range from -
1.21 to 0.46.1 The studies are split evenly on the policy issue of price
subsidization. The implications of these results are difficult to
assess. If little consensus is possible among researchers on empirical
estimates from the same data, the policy implications of the estimates
can be seriously discounted. Whether this is a necessary or extreme
assessment is the principal question of interest posed by the current
state of research on the demand for fertilizer. The aim of this paper is
to review the past research with the intention to assess the conflicting
estimates. We begin with a brief statement of the underlying
methodology; we then critically review each past study; and, finally, we
conclude with an over-all assessment of past research on the demand for

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