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Coffee as an Identifier of Inflation in Selected US Agglomerations

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  • Marek Vochozka

    (Institute of Technology and Business in Ceske Budejovice, Okružní 517/10, 370 01 České Budějovice, Czech Republic)

  • Svatopluk Janek

    (Institute of Technology and Business in Ceske Budejovice, Okružní 517/10, 370 01 České Budějovice, Czech Republic)

  • Zuzana Rowland

    (Institute of Technology and Business in Ceske Budejovice, Okružní 517/10, 370 01 České Budějovice, Czech Republic)

Abstract

The research goal presented in this paper was to determine the strength of the relationship between the price of coffee traded on ICE Futures US and Consumer Price Indices in the major urban agglomerations of the United States—New York, Chicago, and Los Angeles—and to predict the future development. The results obtained using the Pearson correlation coefficient confirmed a very close direct correlation (r = 0.61 for New York and Chicago; r = 0.57 for Los Angeles) between the price of coffee and inflation. The prediction made using the SARIMA model disrupted the mutual correlation. The price of coffee is likely to anchor at a new level where it will fluctuate; on the other hand, the CPIs showed strong unilateral pro-growth trends. The results could be beneficial for the analysis and creation of policies and further analyses of market structures at the technical level.

Suggested Citation

  • Marek Vochozka & Svatopluk Janek & Zuzana Rowland, 2023. "Coffee as an Identifier of Inflation in Selected US Agglomerations," Forecasting, MDPI, vol. 5(1), pages 1-17, January.
    • Handle: RePEc:gam:jforec:v:5:y:2023:i:1:p:7-169:d:1034440
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