The Instability Impact of Oil Revenues on Value-added Agricultural Sector

Any change in the petroleum market indicators such as price or income, almost all petroleum-exporting countries affected. Since the major part of the government's budget obtain from petroleum exports, instability survey of petroleum revenue on various sectors of the Iran's economy such as agriculture is very important. Therefore in this study, the instability impact of petroleum revenues on the value-added of Iran's agricultural Sector was evaluated using the ARDL model in the period of 1971-2007. The results of this study showed that the impact of capital stock and labor on value-added of agricultural sector is positive and significant in short-term and long-term, while the instability variable of petroleum revenues have negative effect on the value-added of agricultural sector in short-term and do not influence it in long-term. The estimated error correction coefficient has the expected sign and it showed that changes in value-added of agricultural sector %45 corrected in each period. Also, the results of stability test showed that estimated parameters are stable. Finally, strengthening agricultural export and applying measures and policies can reduce the effect intensity of petroleum revenues.