stalo6/-Impact-of-Kenya-s-2009-fertilizer-subsidy-policy-on-aggregate-agricultural-output

An Interrupted Time Series Analysis to statistically evaluate the long-term effectiveness of food and seed subsidies on aggregate agricultural productivity in Kenya. # Impact of Kenya's 2009 Fertilizer Subsidy Policy on Aggregate Agricultural Output ### An Interrupted Time Series (ITS) — ARIMAX Analysis | 1960–2022 --- ## Overview Agriculture contributes approximately 22% of Kenya's GDP and employs over 40% of its population, yet smallholder yields remain persistently low due to the under-utilization of agricultural inputs. In 2009, the Kenyan government launched the **National Accelerated Agricultural Inputs Access Program (NAAIAP)** — a targeted voucher-based fertilizer subsidy programme aimed at resource-poor smallholder farmers. This study evaluates the macro-level long-run impact of the NAAIAP on Kenya's **aggregate national agricultural output** using an **Interrupted Time Series (ITS) design with ARIMA errors (ARIMAX)**. Unlike existing evaluations that rely on short-panel or cross-sectional data, this approach enables detection of structural breaks in a 63-year longitudinal output trajectory — filling a critical methodological gap in the literature. --- ## Research Objectives Three ITS coefficients directly map to three research objectives: | # | Coefficient | Objective | |---|-------------|-----------| | 1 | **β₁** | Determine the **pre-intervention baseline trend** (annual growth rate) of agricultural output before 2009 | | 2 | **β₂** | Estimate the **immediate level change** — whether the policy caused a sudden jump in production in 2009 | | 3 | **β₃** | Assess whether the **post-intervention growth rate** significantly accelerated or decelerated after 2009 | | — | **β₄** | Land area elasticity — control variable to isolate the policy effect from land expansion | --- ## Key Findings | Variable | Coefficient | Significant? | Interpretation | |----------|------------|:------------:|----------------| | Pre-intervention trend (`time`) | +0.0275 | Yes | Output grew **2.75% per year** before 2009 | | Immediate level change (`intervention`) | −0.0396 | No | **No significant immediate jump** in outpu …