Analysis of the relationship between price of milk exports and quantity of milk exports a case study of Uganda

Abstract

The main purpose of this study was to investigate the relationship between price of milk exports and quantity of milk exports in Uganda. Emphasis was placed on quarterly observations over the years from 2000 to the year 2018 with 2018 observations being provisional. Trends in each of the involved variables; price of milk exports, quantity of milk exports and tax on milk exports were examined using the Augmented Dickey-fuller test. Univariate analysis was carried out to determine conclusive statistics among which the mean and median values of the variables are included. Bivariate analysis was also executed and it involved determing the Pearson correlation coefficient because the variables included were all continuous. All conclusions in this analysis were drawn at 5% level of significance. Multivariate analysis was also performed and yielded results that identified quantity of milk exports and tax on milk exports as significant predictors of the price of milk exports in Uganda. However, the quantity on milk exports and tax on milk exports explain a relatively small variation in the price of milk exports (14%). This therefore brought about the recommendation that in the attempt to get prices of milk exports right, government ought to also focus greatly on the other factors determining the price of milk exports in Uganda. Hence there is need to carry out further studies on the determinants of price of milk exports in Uganda.