Oil price and food price volatility dynamics: The case of Nigeria
This study examines the long and short run relationships between oil price and food price volatility as well as the causal link between them. The study used annual food price volatility index from FAO from 2000 to 2013 and crude oil price from U.S. Energy Information and Administration (EIA) from 20...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2016-12-01
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| Series: | Cogent Food & Agriculture |
| Subjects: | |
| Online Access: | http://dx.doi.org/10.1080/23311932.2016.1142413 |
| _version_ | 1818870452289798144 |
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| author | Ijeoma C. Nwoko Goodness C. Aye Benjamin C. Asogwa |
| author_facet | Ijeoma C. Nwoko Goodness C. Aye Benjamin C. Asogwa |
| author_sort | Ijeoma C. Nwoko |
| collection | DOAJ |
| description | This study examines the long and short run relationships between oil price and food price volatility as well as the causal link between them. The study used annual food price volatility index from FAO from 2000 to 2013 and crude oil price from U.S. Energy Information and Administration (EIA) from 2000 to 2013. The Johansen and Jesulius co-integration test revealed that there is a long run relationship between oil price and domestic food price volatility. The vector error correction model indicated a positive and significant short run relationship between oil price and food price volatility. The Granger causality test revealed a unidirectional causality with causality running from oil price to food price volatility but not vice versa. It is recommended that policies and interventions that will help reduce uncertainty about food prices such as improved market information, trade policies and investment in research and development among others should be encouraged. Also to reduce the effect of oil price shock, it is recommended that government should subsidise pump price of refined oil, seek alternative sources of energy and there should be less dependence on oil for fertilizer production. |
| first_indexed | 2024-12-19T12:07:15Z |
| format | Article |
| id | doaj.art-1fbc515f02de4b0faa81957503fee016 |
| institution | Directory Open Access Journal |
| issn | 2331-1932 |
| language | English |
| last_indexed | 2024-12-19T12:07:15Z |
| publishDate | 2016-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Food & Agriculture |
| spelling | doaj.art-1fbc515f02de4b0faa81957503fee0162022-12-21T20:22:18ZengTaylor & Francis GroupCogent Food & Agriculture2331-19322016-12-012110.1080/23311932.2016.11424131142413Oil price and food price volatility dynamics: The case of NigeriaIjeoma C. Nwoko0Goodness C. Aye1Benjamin C. Asogwa2Federal University of AgricultureFederal University of AgricultureFederal University of AgricultureThis study examines the long and short run relationships between oil price and food price volatility as well as the causal link between them. The study used annual food price volatility index from FAO from 2000 to 2013 and crude oil price from U.S. Energy Information and Administration (EIA) from 2000 to 2013. The Johansen and Jesulius co-integration test revealed that there is a long run relationship between oil price and domestic food price volatility. The vector error correction model indicated a positive and significant short run relationship between oil price and food price volatility. The Granger causality test revealed a unidirectional causality with causality running from oil price to food price volatility but not vice versa. It is recommended that policies and interventions that will help reduce uncertainty about food prices such as improved market information, trade policies and investment in research and development among others should be encouraged. Also to reduce the effect of oil price shock, it is recommended that government should subsidise pump price of refined oil, seek alternative sources of energy and there should be less dependence on oil for fertilizer production.http://dx.doi.org/10.1080/23311932.2016.1142413food price volatilityoil priceco-integrationgranger causality and vector error correction model |
| spellingShingle | Ijeoma C. Nwoko Goodness C. Aye Benjamin C. Asogwa Oil price and food price volatility dynamics: The case of Nigeria Cogent Food & Agriculture food price volatility oil price co-integration granger causality and vector error correction model |
| title | Oil price and food price volatility dynamics: The case of Nigeria |
| title_full | Oil price and food price volatility dynamics: The case of Nigeria |
| title_fullStr | Oil price and food price volatility dynamics: The case of Nigeria |
| title_full_unstemmed | Oil price and food price volatility dynamics: The case of Nigeria |
| title_short | Oil price and food price volatility dynamics: The case of Nigeria |
| title_sort | oil price and food price volatility dynamics the case of nigeria |
| topic | food price volatility oil price co-integration granger causality and vector error correction model |
| url | http://dx.doi.org/10.1080/23311932.2016.1142413 |
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