EXPLANATORY POWER OF PRICE SHOCKS IN FOOD SECURITY EQUATION OF NET FOOD BUYERS IN NIGERIA

Year 2019, Volume: 12 Issue: 1, 83 - 92, 23.01.2019

Felix Achoja , Daniel Okeke

https://doi.org/10.25287/ohuiibf.462961

Abstract

In a developing
country such as Nigeria, fluctuation in macroeconomic factors can bring about
food price shocks and food insecurity. It is important to investigate whether
food price shocks have impacted the food security status of net food buying
households. This study specifically examines the effect of food price shocks on
the food security status of net food buying households in Nigeria. Secondary
data were elicited from Central Bank of Nigeria (CBN) and NBS (National Bureau
of Statistics) for the 1995-2016 years period. In analyzing the collected data,
descriptive statistics (mean and percentage), coefficient of variation and
regression model were used. The result revealed that all macroeconomic factors
except exchange rate have a positive and significant relationship with food
price shock. The result also indicated a 64.35% variation in food price shock
with a variation of 38.07% in consumption expenditure (food security status)
over the time period. On account of this, minimum consumption expenditure was
over N1, 304 compared to the World Bank consumption expenditure per person.
Hence revealing that net buying households have extremely high cost of living
and low welfare status (food security status). On the basis of this findings.
It is recommended that the government should implement policies and regulations
that will control and stabilize those macroeconomic factors that can agitate
increases in food prices and cause food price shocks. This study had filled the
knowledge gap by providing information on the degree to which food price shocks
can affect the food security status of net food buying households in
Nigeria.  

 

Keywords

Food, Price, Shocks, Consumption Expenditure

EXPLANATORY POWER OF PRICE SHOCKS IN FOOD SECURITY EQUATION OF NET FOOD BUYERS IN NIGERIA

Abstract

In a developing country such as Nigeria, fluctuation in macroeconomic factors can bring about food price shocks and food insecurity. It is important to investigate whether food price shocks have impacted the food security status of net food buying households. This study specifically examines the effect of food price shocks on the food security status of net food buying households in Nigeria. Secondary data were elicited from Central Bank of Nigeria and National Bureau of Statistics for the 1995-2016 years period. In analyzing the collected data, descriptive statistics (mean and percentage), coefficient of variation and regression model were used. The result revealed that all macroeconomic factors except exchange rate have a positive and significant relationship with food price shock. The result also indicated a 64.35% variation in food price shock with a variation of 38.07% in consumption expenditure (food security status) over the time period. On account of this, minimum consumption expenditure was over N1,304 compared to the World Bank consumption expenditure per person. Hence revealing that net buying households have extremely high cost of living and low welfare status (food security status). On the basis of this findings. It is recommended that the government should implement policies and regulations that will control and stabilize those macroeconomic factors that can agitate increases in food prices and cause food price shocks. This study had filled the knowledge gap by providing information on the degree to which food price shocks can affect the food security status of net food buying households in Nigeria. 

Keywords

Food security, Price shocks, Consumption expenditure, Net food buyers

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