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New insights into an old issue: modelling the U.S. food prices

Author

Listed:
  • Dervis Kirikkaleli

    (European University of Lefke)

  • Ibrahim Darbaz

    (European University of Lefke)

Abstract

The study attempts to add significant outcomes to the U.S. food prices literature by performing a dynamic regression model and a frequency domain causality test to explore the causality and relationships between U.S. food prices, energy prices, economic policy uncertainty, and the value of the U.S. dollar. It is shown that dollar price negatively affects the food price index at both high and low volatility periods. Furthermore, it is presented that there is a permanent long-run causal relationship running from the dollar index to the food price index. The results indicated that there is a significant positive relationship between the energy price index and the food price index. Moreover, energy is found to be a long-run and permanent cause of the food price index. The effect of uncertainty has not been sufficiently explored in the food pricing field, the outcome of this study reveals that uncertainty increases the food price index at high volatility times. Besides, uncertainty is shown to be the long-run and permanent cause of the food price index.

Suggested Citation

  • Dervis Kirikkaleli & Ibrahim Darbaz, 2022. "New insights into an old issue: modelling the U.S. food prices," Letters in Spatial and Resource Sciences, Springer, vol. 15(3), pages 675-689, December.
    • Handle: RePEc:spr:lsprsc:v:15:y:2022:i:3:d:10.1007_s12076-022-00319-3
    DOI: 10.1007/s12076-022-00319-3
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    More about this item

    Keywords

    Food price; U.S.; Energy; Uncertainty; Causality;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics

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