Analysis of Potato Production and Price Relationship in Türkiye with Koyck Model

This study examines how production decisions for annual crops are largely based on price signals from previous years, which in turn lead to fluctuations in both production volume and prices, particularly in the potato sector. Using 24 years of time-series data from 2004 to 2023, the dynamic relationship between potato production volume and prices in Türkiye was analyzed through the Koyck distributed lag model. Model results indicate that potato production decisions are particularly sensitive to price developments over the previous two years. Since the variables are specified in logarithmic form, the estimated coefficients should be interpreted as elasticities. Accordingly, a 1% increase in current-year potato prices leads to an approximately 0.076% increase in potato production. However, the effects of lagged prices diminish over time: a one-period lagged price change increases production by 0.025 tons, while a two-period lagged price change increases it by only 0.008 tons. Furthermore, based on the adjustment coefficient derived from the model, it is estimated that approximately 0.490 years (around six months) are required for the full impact of a price change on production volume to be realized. This finding suggests a gradual adjustment process in producers’ responsiveness to price signals.