Ridge Regression: A tool to forecast wheat area and production

This research study is designed to develop forecasting models for acreage and production of wheat crop for Chakwal district of Rawalpindi region keeping in view the assumptions of OLS estimation. The forecasting models are developed on the basis of 15 years data from 1984‐85 to 1998‐99 then wheat area and production for next five years from 1999‐2000 to 2003‐04 is forecasted through the models and compared with the actual figures. After evaluating the accuracy of the models, final models are developed on the basis of 20 years data for the period 1984‐85 to 2003‐04. These linear models can be used to forecast wheat area and production of next five years. The Urea fertilizer, DAP fertilizer and manures plays a significant role to enhance the production of wheat crop. Number of ploughs in the wheat fields is significant factor to increase the production of wheat crop. Good rains in the month of October and November significantly contributes to increase the production of wheat crop and mean maximum temperature in the month of March is a significant factor to reduce the production of wheat crop.