Dynamics of Food Price Volatility and Households’ Welfare in Nigeria

Onwusiribe Ndubuisi ChigozirimNto Philips OkoreOteh Ogbonnaya UkehAgwu Nnanna Mba

DOI 10.7160/aol.2021.130405
No 4/2021, December
pp. 49-60

Chigozirim, O. N., Okore, N. P., Ukeh, O. O. and Mba, A. N. (2021) “Dynamics of Food Price Volatility and Households’ Welfare in Nigeria", AGRIS on-line Papers in Economics and Informatics, Vol. 13, No. 4, pp. 49-60. ISSN 1804-1930. DOI 10.7160/aol.2021.130405.

Abstract

One of the most important economic factors in food choice is the price. Food dynamics' value is a subject of controversies and opinions, especially price issues, and sensitivity is often peculiar to seasons and market forces. Price dynamics have the potential to introduce and change consumptions, thus affecting household welfare. This study examined the dynamics of food price volatility and households' welfare in Nigeria from 1990: Q1 to 2019: Q4. We sourced the study data from the Food and Agriculture Organization (FAO) and the World Bank (WB). We estimated the quadratic trend equation, Generalized Autoregressive Conditional Heteroscedasticity (GARCH), and Auto-Regressive Distributed Lag (ARDL) models. Food prices and depth of food deficit had a significant short-run impact on the households' welfare. Policymakers should focus on the short-term benefits while formulating policies aimed at households' welfare because policies aimed at the household level are impactful in the short-run compared to the long-run.

Keywords

Food, price, household, welfare, volatility.

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