Mathematical Modelling and Applications

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Time Series Analysis and Forecasting of Household Products’ Prices (A Case Study of Nyeri County)

Received: 17 March 2022    Accepted: 31 January 2023    Published: 22 May 2023
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Abstract

Inflation has a significant impact on both consumable and non-consumable products and plays a critical role in determining the cost of living. The study aimed to investigate the trend of household consumable and non-consumable prices over the past three years and identify the best ARIMA model for future price predictions. The results showed that consumable goods played a greater role in determining the national inflation compared to non-consumable goods. A relationship was found between the changes in local-level prices and national monthly inflation rates, with consumable goods being fitted to an ARIMA (1,2,2) model and national inflation rates to ARIMA (3,1,0). Non-consumable goods were found to be a white noise. The models were found to be adequate in forecasting changes in prices, with their validity confirmed by the Box-Ljung test and autocorrelation coefficients of model residuals. This study demonstrated the importance of analyzing changes in products’ prices at a local level and how it affects the national inflation rate. In future, similar studies can be carried out in different counties and with a more comprehensive model to investigate the impact of the COVID-19 pandemic on the prices of household consumable and non-consumable goods at the local level.

DOI 10.11648/j.mma.20230801.11
Published in Mathematical Modelling and Applications (Volume 8, Issue 1, March 2023)
Page(s) 1-12
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

ARIMA Model, Consumable Goods, Non-Consumable Goods, Inflation

References
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  • APA Style

    Muriuki Brian Muriithi, Waiguru Samuel. (2023). Time Series Analysis and Forecasting of Household Products’ Prices (A Case Study of Nyeri County). Mathematical Modelling and Applications, 8(1), 1-12. https://doi.org/10.11648/j.mma.20230801.11

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    ACS Style

    Muriuki Brian Muriithi; Waiguru Samuel. Time Series Analysis and Forecasting of Household Products’ Prices (A Case Study of Nyeri County). Math. Model. Appl. 2023, 8(1), 1-12. doi: 10.11648/j.mma.20230801.11

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    AMA Style

    Muriuki Brian Muriithi, Waiguru Samuel. Time Series Analysis and Forecasting of Household Products’ Prices (A Case Study of Nyeri County). Math Model Appl. 2023;8(1):1-12. doi: 10.11648/j.mma.20230801.11

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  • @article{10.11648/j.mma.20230801.11,
      author = {Muriuki Brian Muriithi and Waiguru Samuel},
      title = {Time Series Analysis and Forecasting of Household Products’ Prices (A Case Study of Nyeri County)},
      journal = {Mathematical Modelling and Applications},
      volume = {8},
      number = {1},
      pages = {1-12},
      doi = {10.11648/j.mma.20230801.11},
      url = {https://doi.org/10.11648/j.mma.20230801.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.mma.20230801.11},
      abstract = {Inflation has a significant impact on both consumable and non-consumable products and plays a critical role in determining the cost of living. The study aimed to investigate the trend of household consumable and non-consumable prices over the past three years and identify the best ARIMA model for future price predictions. The results showed that consumable goods played a greater role in determining the national inflation compared to non-consumable goods. A relationship was found between the changes in local-level prices and national monthly inflation rates, with consumable goods being fitted to an ARIMA (1,2,2) model and national inflation rates to ARIMA (3,1,0). Non-consumable goods were found to be a white noise. The models were found to be adequate in forecasting changes in prices, with their validity confirmed by the Box-Ljung test and autocorrelation coefficients of model residuals. This study demonstrated the importance of analyzing changes in products’ prices at a local level and how it affects the national inflation rate. In future, similar studies can be carried out in different counties and with a more comprehensive model to investigate the impact of the COVID-19 pandemic on the prices of household consumable and non-consumable goods at the local level.},
     year = {2023}
    }
    

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    AU  - Muriuki Brian Muriithi
    AU  - Waiguru Samuel
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    N1  - https://doi.org/10.11648/j.mma.20230801.11
    DO  - 10.11648/j.mma.20230801.11
    T2  - Mathematical Modelling and Applications
    JF  - Mathematical Modelling and Applications
    JO  - Mathematical Modelling and Applications
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    EP  - 12
    PB  - Science Publishing Group
    SN  - 2575-1794
    UR  - https://doi.org/10.11648/j.mma.20230801.11
    AB  - Inflation has a significant impact on both consumable and non-consumable products and plays a critical role in determining the cost of living. The study aimed to investigate the trend of household consumable and non-consumable prices over the past three years and identify the best ARIMA model for future price predictions. The results showed that consumable goods played a greater role in determining the national inflation compared to non-consumable goods. A relationship was found between the changes in local-level prices and national monthly inflation rates, with consumable goods being fitted to an ARIMA (1,2,2) model and national inflation rates to ARIMA (3,1,0). Non-consumable goods were found to be a white noise. The models were found to be adequate in forecasting changes in prices, with their validity confirmed by the Box-Ljung test and autocorrelation coefficients of model residuals. This study demonstrated the importance of analyzing changes in products’ prices at a local level and how it affects the national inflation rate. In future, similar studies can be carried out in different counties and with a more comprehensive model to investigate the impact of the COVID-19 pandemic on the prices of household consumable and non-consumable goods at the local level.
    VL  - 8
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Author Information
  • Department of Pure and Applied Sciences, Kirinyaga University, Kerugoya, Kenya

  • Department of Mathematics and Statistics, Jomo Kenyatta University of Agriculture and Technology, Juja, Kenya

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