Nutrition and economic growth in South Africa: a threshold co-integration approach
Abstract
Purpose – The purpose of this paper is to examine asymmetric co-integration effects between
nutrition and economic growth for annual South African data from the period 1961-2013.
Design/methodology/approach – The authors deviate from the conventional assumption of linear
co-integration and pragmatically incorporate asymmetric effects in the framework through a fusion
of the momentum threshold autoregressive and threshold error correction (MTAR-TEC) model
approaches, which essentially combines the adjustment asymmetry model of Enders and Silkos (2001);
with causality analysis as introduced by Granger (1969); all encompassed by/within the threshold
autoregressive (TAR) framework, a la Hansen (2000).
Findings – The findings obtained from the study uncover a number of interesting phenomena for the
South Africa economy. First, in coherence with previous studies conducted for developing economies,
the authors establish a positive relationship between nutrition and economic growth with an estimated
income elasticity of nutritional intake of 0.15. Second, the authors find bi-direction causality between
nutrition and economic growth with a stronger causal effect running from nutrition to economic growth.
Lastly, the authors find that in the face of equilibrium shocks to the variables, policymakers are slow to
responding to deviations of the variables from their co-integrated long run steady state equilibrium.
Originality/value – In the study, the authors make a novel contribution to the literature by exploring
asymmetric modelling in the correlation between nutrition intake and economic growth for the
exclusive case of South Africa.