DOI: https://doi.org/10.14710/agrisocionomics.v7i3.16460

CAUSALITY ANALYSIS OF RICE PRICES WITH INFLATION RATE IN INDONESIA

Anggityas Werdining Pangesti  -  Agribusiness, Faculty of Agriculture, Universitas Sebelas Maret, Surakarta, Central Java, Indonesia, Indonesia
Darsono Darsono  -  Agribusiness, Faculty of Agriculture, Universitas Sebelas Maret, Surakarta, Central Java, Indonesia, Indonesia
*Ernoiz Antriyandarti orcid  -  Agribusiness, Faculty of Agriculture, Universitas Sebelas Maret, Surakarta, Central Java, Indonesia, Indonesia
Open Access Copyright 2023 Agrisocionomics: Jurnal Sosial Ekonomi Pertanian under http://creativecommons.org/licenses/by-sa/4.0.

Citation Format:
Abstract

Indonesia is one of the countries with the largest rice consumption in the world. The strategic value of rice places it as a commodity contributing to inflation. This study aims to investigate the causal relationship between rice prices and the inflation rate in Indonesia and to analyze the role of rice prices in the inflation rate in Indonesia. The rice price and inflation rate data used are secondary data with monthly periods obtained from the Indonesian Central Bureau of Statistics, Bulog (The National Logistics Agency), Ministry of Agriculture, Ministry of Trade, FAO and United States Department of Agriculture, and the United States Census Bureau. The analysis was carried out using Granger Causality and Vector Error Correction Model (VECM) utilized by the E-Views application. The Granger Causality test results show a causality relationship between rice prices and the inflation rate in Indonesia with a bi-directional causality pattern. We also found a long-run relationship. Impulse Response Function shows that shock in the rice prices will affect inflation throughout the sixth month until it converges and is stable. In line with the results of the Impulse Response Function, analysis of Variance Decomposition shows that changes in rice prices play a role in explaining the difference in the inflation rate of 2,77%.

Fulltext View|Download
Keywords: causality, inflation, rice price, VECM

Article Metrics:

Article Info
Section: Articles
Language : EN
Recent articles
IMPACT OF SELF-SUFFICIENCY FISH FEED PROGRAM ON THE FISH FARMING BUSINESS PERFORMANCE THE INFLUENCE OF VEGETABLE FARMERS' PERCEPTIONS AND INTERESTS ON THE DECISION TO USE FINANCIAL TECHNOLOGY IN PASIRWANGI SUBDISTRICT, GARUT DISTRICT THE INFLUENCE OF FINANCIAL INSTITUTIONS ON THE GROWTH OF THE MICRO AND SMALL AGRIBUSINESS INDUSTRY IN INDONESIA More recent articles
  1. Agustono, E. Antriyandarti, S. W. Ani, E. Rusdiyana, and A. Imawati. 2020. Meninjau Kebijakan Impor Beras. Absolute Media
  2. Antriyandarti, E. 2015. Competitiveness and Cost Efficiency of Rice Farming in Indonesia. Journal of Rural Problems, 51(2): 74–85. https://doi.org/10.7310/arfe.51.74
  3. Antriyandarti, E., E. Agustono, Rusdiyana, and S. W. Ani. 2021. The dynamics of household residence and decision making where to purchase rice in a sustainable development era : A case study in urban and rural Indonesia The dynamics of household residence and decision making where to purchase rice in a sustainable dev. Earth and Environmental Science. https://doi.org/10.1088/1755-1315/739/1/012049
  4. BAPPENAS. 2015. Perkembangan Ekonomi Indonesia dan Dunia
  5. Basuki, A. T. and N. Prawoto. 2016. Analisis Regresi Dalam Penelitian Ekonomi & Bisnis : Dilengkapi Aplikasi SPSS & EVIEWS. PT Rajagrafindo Persada
  6. Brillianta H., N., A. S. Kadir, and A. Yulianita. 2019. Analisis kausalitas antara pengeluaran pemerintah dan pertumbuhan ekonomi di Pulau Sumatera. Jurnal Ekonomi Pembangunan, 15(1): 15–34. https://doi.org/10.29259/jep.v15i1.8779
  7. Dawe, D. 2014. Rice self-sufficiency: Nature versus Nuture. Rice in the Shadow of Skyscrapers: Policy Choices in a Dynamic East and Southeast Asian Setting, 8 – 31. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85081909319&partnerID=40&md5=9f6409a4cdec46f2c14e0568510a3972
  8. Dawe, D., and C. P. Timmer. 2012. Why stable food prices are a good thing: Lessons from stabilizing rice prices in Asia. Global Food Security, 1(2): 127–133. https://doi.org/10.1016/j.gfs.2012.09.001
  9. Dickey, D. A. and Fuller, W. A. 1981. Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root. Econometrica, 49(4): 1057–1072
  10. Ekowati, T., E. Prasetyo, and Mukson. 2020. The stability of supply and rice price in Sukoharjo regency. Agraris, 6(1): 52–62. https://doi.org/10.18196/agr.6190
  11. Ellis, F. 1993. Private trade and public role in staple food marketing :The case of rice in Indonesia. Food Policy, 18(5): 428–438. https://doi.org/10.1016/0306-9192(93)90065-j
  12. Enders, W. 2015. Applied Econometric Time Series (Fourth Edi). John Wiley & Sons, Inc
  13. Escribano, Á. and D. Wang. 2021. Mixed random forest, cointegration, and forecasting gasoline prices. International Journal of Forecasting, 37(4): 1442–1462. https://doi.org/10.1016/j.ijforecast.2020.12.008
  14. FAO Reginal Office for Asia and the Pacific. 2013. Asia Pacific food price and policy monitor: November 2013-Issue 5
  15. Fujii, T. 2013. Impact of food inflation on poverty in the Philippines. Food Policy, 39(2):13–27. https://doi.org/10.1016/j.foodpol.2012.11.009
  16. Grabowski, R. and S. Self. 2016. Staple Food Price Instability and Structural Change: Indonesian Experience. Journal of Asian Economics, 47: 35–44. https://doi.org/10.1016/j.asieco.2016.10.001
  17. Granger, C. W. J. 1969. Investigating Causal Relations by Econometric Models and Cross-Spectral Methods. Econometrica, 37(3): 31–47. https://doi.org/10.1017/ccol052179207x.002
  18. Gujarati, D. N. 2009. Basic Econometrics (Fifth). McGraw Hill
  19. Ismet, M., A. P. Barkley, and R. V. Llewelyn. 1998. Government intervention and market integration in Indonesian rice markets. Agricultural Economics, 19(3): 283–295. https://doi.org/10.1111/j.1574-0862.1998.tb00532.x
  20. Johansen, S. 1988. Statistical Analysis of Cointegration Vectors. Journal of Economic Dynamics and Control, 12(2–3): 231–254. https://doi.org/10.1016/0165-1889(88)90041-3
  21. Kasryno, F., P. Simatupang, E. Pasandaran, and S. Adiningsih. 2016. Reformulasi Kebijaksanaan Perberasan Nasional. Forum Penelitian Agro Ekonomi, 19(2): 188-186. https://doi.org/10.21082/fae.v19n2.2001.1-23
  22. Khudori. 2016. Reorientasi Kebijakan Perberasan. Jurnal Pangan, 18(53): 16–31
  23. Ministry of Trade. 2015. Laporan Akhir Analisis Efektifitas Operasi Pasar Beras
  24. Nugrahapsari, R. A. and M. P. Hutagaol. 2021. Tinjauan Kritis Terhadap Kebijakan Harga Gabah Dan Beras Di Indonesia. Forum Penelitian Agro Ekonomi, 39(1): 11. https://doi.org/10.21082/fae.v39n1.2021.11-26
  25. Ohyver, M. and H. Pudjihastuti. 2018. Arima Model for Forecasting the Price of Medium Quality Rice to Anticipate Price Fluctuations. Procedia Computer Science, 135(3):707–711. https://doi.org/10.1016/j.procs.2018.08.215
  26. Panuju, D. R., K. Mizuno, and B. H. Trisasongko. 2013. The dynamics of rice production in Indonesia 1961 – 2009. Journal of the Saudi Society of Agricultural Sciences, 12(1): 27–37. https://doi.org/10.1016/j.jssas.2012.05.002
  27. Rahmadhani, A. 2016. Analisis Determinan Inflasi di Indonesia. Universitas Gajah Mada
  28. Ratnasiri, H. P. G. S. 2011. The Determinants of Inflation in Sri Lanka. South Asia Economic Journal, 39(12): 271–286. https://doi.org/10.1177/139156141101200204
  29. Resnia, R. and A. Wirastuti. 2009. Kebijakan Stabilisasi Harga Beras. Buletin Ilmiah Litbang Perdagangan, 3(1):1-11
  30. Reza, M. A., M. Firdaus, and T. Novianti. 2014. Analyses of Food Price Stabilization in Indonesia. ASEAN Journal of Economics, Management and Accounting, 2(1): 48–63
  31. Salam, M., A. N. Sari, R. Bakri, M. Arsyad, Saadah, M. H. Jamil, A. N. Tenriawaru, and A. I. Muslim. 2019. Determinant factors affecting farmers ’ income of rice farming in Indonesia. IOP Conf. Series: Earth and Environmental Science 343. https://doi.org/10.1088/1755-1315/343/1/012115
  32. Saputra, A., B. Arifin, E. Kasymir. 2014. Analisis Kausalitas Harga Beras, Harga Pembelian Pemerintah (HPP) dan Inflasi serta Efektivitas Kebijakan HPP di Indonesia. JIIA, 2(1): 24–31
  33. Sasmal, J. 2015. Food price inflation in India: The growing economy with sluggish agriculture. Journal of Economics, Finance and Administrative Science, 20(38): 30–40. https://doi.org/10.1016/j.jefas.2015.01.005
  34. Setiawan, A. F. and A. Hadianto. 2014. Fluktuasi Harga Komoditas Pangan dan Dampaknya Terhadap Inflasi di Provinsi Banten. Jurnal Ekonomi Pertanian, Sumberdaya dan Lingkungan, 2(1): 1–14
  35. Singh, Y. 2006. Fundamental of Research Methodology and Statistics. New Age International (P) Limited
  36. Siswanto, E., S. B. Marulitua, and Harianto. 2018. The Impact of Rice Policy on Rice Market and The Welfare of Rice Producers and Consumers in Indonesia. Jurnal Ilmu Pertanian Indonesia, 23(2): 93–100. https://doi.org/10.18343/jipi.23.2.93
  37. Sugiyanto, C. 2006. Permintaan Beras Di Indonesia: Revisited. Journal of Indonesian Economy and Business, 21(2): 138–155
  38. Suryani, E., R. A. Hendrawan, U. E. Rahmawati, U. and S. Chou. 2022. Scenario Development to Create a Sustainable Price of rice : rice : A System Thinking Approach. Procedia Computer Science, 197(2021): 599–606. https://doi.org/10.1016/j.procs.2021.12.178
  39. Svanidze, M., L. Götz, I. Djuric, and T. Glauben. 2019. Food security and the functioning of wheat markets in Eurasia: a comparative price transmission analysis for the countries of Central Asia and the South Caucasus. Food Security, 11(3): 733–752. https://doi.org/10.1007/s12571-019-00933-y
  40. Widiarsih, D. 2012. Pengaruh Sektor Komoditi Beras Terhadap Inflasi Bahan Makanan. Jurnal Sosial Ekonomi Pembangunan, 2(6): 244–256. https://ejournal.unri.ac.id/index.php/JSEP/article/view/863
  41. Zhang, W. and D. Law. 2010. What Drives China’s Food-Price Inflation and How does It Affect the Aggregate Inflation? Hong Kong Monetary Authority Working Paper, 06

Last update:

No citation recorded.

Last update:

No citation recorded.