Effect of Shocks on Price of Imported Rice in Rural and Urban Markets of Niger State, (2000-2016), Nigeria

Abstract

The study analyzes the effect of shocks on price of imported rice in rural and urban markets of Niger State, objectives of the study are to describe trend in prices, to determine market integration and to examine the effect of shock in prices. Time series data of average monthly retailed prices of imported rice per kilogram(kg) was collected from National Bureau of Statistics (NBS) for year 2000 to 2016. Analytical tools employed in the study include trend analysis, market integration and Impulse Response Function (IRF). EViews software was used for the analyses. The result revealed that maximum prices per kg were 346.02 and 345.89 in rural and urban markets respectively, the trend revealed that prices were moving together in an undulating manner. Prices were integrated of order one I(1) and cointegration result shows that there is long run relationship between prices in rural and urban markets. The result of IRF revealed that a standard deviation shock in price of imported rice in rural market have a permanent effect in price in urban market and a shock to price in urban market have a transitory effect on price in rural market. The study recommends that necessary policies should be put in place to curb the influx of imported rice and also stability in prices, external shock especially uncontrolled rise in pump price should be regulated.