1. Background
2. Objectives
3. Methods
3.1. Model Specification
| Variable | Description | Source |
|---|---|---|
| NPU | The number of the population undernourished measured in million as a three-year average. | UNFAO |
| ALR | The adult literacy rate is expressed in percentage. | World Bank |
| LGDP | Natural logarithm of gross domestic product in terms of 2010 constant US dollars. |
4. Results
4.1. An Overview of Undernourishment in South Asia
| Country | 2001 | 2005 | 2010 | 2015 | 2016 | 2017 | 2018 |
|---|---|---|---|---|---|---|---|
| Number of People Undernourished, Million | |||||||
| Bangladesh | 20.8 | 19.9 | 20.3 | 23.3 | 22.3 | 21.5 | 20.9 |
| India | 199.6 | 249.4 | 200.9 | 193.1 | 190.9 | 190.1 | 189.2 |
| Nepal | 5.7 | 4.3 | 2.7 | 1.7 | 1.6 | 1.7 | 1.7 |
| Pakistan | 31 | 28.4 | 30.4 | 25.4 | 24.6 | 24.8 | 26.1 |
| Sri Lanka | 3.2 | 2.9 | 2.1 | 1.8 | 1.7 | 1.6 | 1.6 |
| Prevalence of Undernourishment, % | |||||||
| Bangladesh | 16 | 14.3 | 13.8 | 14.9 | 14.1 | 13.5 | 13 |
| India | 18.6 | 21.7 | 16.3 | 14.7 | 14.4 | 14.2 | 14 |
| Nepal | 23.6 | 16.9 | 9.9 | 6.4 | 6 | 6 | 6.1 |
| Pakistan | 21.2 | 17.7 | 16.9 | 12.8 | 12.1 | 12 | 12.3 |
| Sri Lanka | 17 | 14.8 | 10.4 | 8.7 | 8.3 | 7.8 | 7.6 |
| Adult Literacy Rates | |||||||
| Bangladesh | 47.49 | 54.222 | 62.63 | 71.04 | 72.76 | 72.89 | 73.91 |
| India | 61.01 | 62.407 | 67.99 | 72.2 | 72.93 | 73.65 | 74.37 |
| Nepal | 48.61 | 53.016 | 58.53 | 64.36 | 65.54 | 66.73 | 67.91 |
| Pakistan | 49.28 | 49.874 | 55.38 | 57.7 | 58.41 | 59.13 | 59.53 |
| Sri Lanka | 90.68 | 90.784 | 91.18 | 92.19 | 92.39 | 91.9 | 91.71 |
| GDP in Billion US Dollars at 2010 Prices | |||||||
| Bangladesh | 70.42 | 85.86 | 115.3 | 156.6 | 167.8 | 180 | 194.1 |
| India | 915.49 | 1193.87 | 1676 | 2295 | 2484 | 2659 | 2822 |
| Nepal | 11.42 | 12.88 | 16 | 19.77 | 19.89 | 21.53 | 22.97 |
| Pakistan | 120.9 | 150.18 | 177.2 | 215.6 | 227.6 | 240.2 | 254.2 |
| Sri Lanka | 33.74 | 41.633 | 56.73 | 76.49 | 79.92 | 82.78 | 85.51 |
aSource: The World Bank (18).
4.2. Unit Root Test Results
| Variable and Method | At Level | At 1st Diff | |||
|---|---|---|---|---|---|
| Statistic | Prob. | Statistic | Prob. | ||
| NPU | |||||
| LLC | Common unit root | -1.64641 | 0.0498 | -3.03673 | 0.0012*** |
| IPS | Individual unit root | -1.26307 | 0.1033 | -3.70008 | 0.0001*** |
| ADF | Individual unit root | 14.8072 | 0.1392 | 32.5394 | 0.0003*** |
| PP | Individual unit root | 7.90720 | 0.6379 | 16.5139 | 0.0858 |
| Hadri | Individual unit root | 4.03006 | 0.0000 | -0.24297 | 0.5960* |
| ALR | |||||
| LLC | Common unit root | 1.80955 | 0.9648 | -4.75628 | 0.0000*** |
| IPS | Individual unit root | 2.18306 | 0.9855 | -5.19183 | 0.0000*** |
| ADF | Individual unit root | 4.63986 | 0.9139 | 66.6242 | 0.0000*** |
| PP | Individual unit root | 4.03941 | 0.9456 | 273.145 | 0.0000*** |
| Hadri | Individual unit root | 5.94110 | 0.0000 | 0.45966 | 0.3229* |
| LGDP | |||||
| LLC | Common unit root | 2.88739 | 0.9981 | -2.93437 | 0.0017*** |
| IPS | Individual unit root | 4.86471 | 1.0000 | -3.55529 | 0.0002*** |
| ADF | Individual unit root | 0.95048 | 0.9999 | 31.1171 | 0.0006*** |
| PP | Individual unit root | 1.04631 | 0.9998 | 40.1118 | 0.0000*** |
| Hadri | Individual unit root | 6.00565 | 0.0000 | 1.29897 | 0.0970* |
aNote: ***, **, and * denote significance at 1%, 5%, and 10% level respectively.
4.3. Johansen-Fisher Panel Cointegration Test Result
| Hypothesized | Fisher Stat.a | Fisher Stat.α | ||
|---|---|---|---|---|
| Number of CE(s) | (from trace test) | Prob. | (from max-eigen test) | Prob. |
| None | 66.77 | 0.0000*** | 47.00 | 0.0000*** |
| At most 1 | 33.14 | 0.0003*** | 23.69 | 0.0085*** |
| At most 2 | 25.98 | 0.0038*** | 25.98 | 0.0038*** |
aNote: α, probabilities are computed using asymptotic chi-square distribution; ***, denote significance at 1%, level.
4.4. VECM Estimation Results
| Lag | LogL | LR | FPE | AIC | SC | HQ |
|---|---|---|---|---|---|---|
| 0 | -610.9405 | NA | 995987.2 | 22.32511 | 22.43460 | 22.36745 |
| 1 | -12.82335 | 1109.235 | 0.000495 | 0.902667 | 1.340631 | 1.072031 |
| 2 | 9.941651 | 39.73527 | 0.000301 | 0.402122 | 1.168558 | 0.698509 |
| 3 | 45.42020 | 58.05580 | 0.000116 | -0.560734 | 0.534175* | -0.137324 |
| 4 | 51.59453 | 9.429884 | 0.000130 | -0.457983 | 0.965399 | 0.092450 |
| 5 | 74.08440 | 31.89474 | 8.19e-05 | -0.948524 | 0.803331 | -0.271068 |
| 6 | 87.49011 | 17.54929 | 7.24e-05 | -1.108731 | 0.971596 | -0.304252 |
| 7 | 101.9317 | 17.32990* | 6.26e-05* | -1.306607* | 1.102193 | -0.375105* |
Abbreviations: AIC, Akaike information criterion; FPE, final prediction error; HQ, Hannan-Quinn information criterion; LR, sequentially modified LR test statistic (each test at 5% level); SC, Schwarz information criterion.
aNote: *, indicates lag order selected by the criterion.
5. Discussion
5.1. Short-Run Dynamics
| Coefficient | Coefficient | Std. Error | t-Statistic | Prob. |
|---|---|---|---|---|
| C(1) | -0.008334 | 0.003120 | -2.671432 | 0.0114** |
| C(2) | 0.573702 | 0.123574 | 4.642600 | 0.0000*** |
| C(3) | -0.245364 | 0.145919 | -1.681506 | 0.1016 |
| C(4) | -0.020866 | 0.146718 | -0.142221 | 0.8877 |
| C(5) | 0.158621 | 0.128340 | 1.235945 | 0.2247 |
| C(6) | -0.363455 | 0.099282 | -3.660850 | 0.0008*** |
| C(7) | 0.250468 | 0.063375 | 3.952158 | 0.0004*** |
| C(8) | -0.453066 | 0.242873 | -1.865446 | 0.0705* |
| C(9) | -0.042034 | 0.258683 | -0.162494 | 0.8719 |
| C(10) | 0.538067 | 0.272868 | 1.971892 | 0.0566* |
| C(11) | 0.390797 | 0.235383 | 1.660259 | 0.1058 |
| C(12) | 0.038472 | 0.268603 | 0.143230 | 0.8869 |
| C(13) | -0.113230 | 0.218050 | -0.519287 | 0.6068 |
| C(14) | -21.35264 | 7.510337 | -2.843100 | 0.0074*** |
| C(15) | 5.054283 | 8.911591 | 0.567158 | 0.5742 |
| C(16) | -23.90185 | 8.993595 | -2.657653 | 0.0118** |
| C(17) | 3.589238 | 9.806903 | 0.365991 | 0.7166 |
| C(18) | -5.776459 | 9.277014 | -0.622664 | 0.5375 |
| C(19) | -6.745378 | 7.671670 | -0.879258 | 0.3853 |
| C(20) | 2.006492 | 0.858434 | 2.337387 | 0.0253** |
| R-squared | 0.906448 | Durbin-Watson stat | 1.852877 | |
| Adjusted R-squared | 0.855662 | F-statistic | 17.84854*** | |
aNote: ***, **, and * denote significance at 1%, 5%, and 10% level respectively.
5.2. Toda-Yamamoto Granger Causality Test Results
| Null Hypothesis | Chi-sq | df | Prob. | Direction of Causality |
|---|---|---|---|---|
| ALR does not Granger cause NPU | 23.29481 | 8 | 0.0030*** | ALR → NPU, unidirectional |
| NPU does not Granger cause ALR | 12.93240 | 8 | 0.1142 | |
| LGDP does not Granger cause NPU | 9.589230 | 8 | 0.2950 | No causality |
| NPU does not Granger cause LGDP | 10.66906 | 8 | 0.2212 | |
| LGDP does not Granger cause ALR | 6.695411 | 8 | 0.5698 | ALR → LGDP, unidirectional |
| ALR does not Granger cause LGDP | 22.80829 | 8 | 0.0036*** |
aNote: ***, denote significance at 1% level.