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Food Price Inflation in India: Determinants and their Asymmetric Impact

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  • Sharma, Purushottam
  • Meena, Dinesh Chand
  • Anwer, Md. Ejaz

Abstract

The study examines the asymmetric dynamic relationship between food price inflation and its determinants in both the short and long run, evaluates the impact of asymmetry on Indian food prices, and explores the pass-through effect from non-food to food price inflation and vice versa. The ARDL and NARDL models were used to explore the dynamics of food inflation and its drivers using monthly data from January 2011 to December 2022. The DOLS method was also used to estimate the pass-through effect between non-food and food inflation, to better understand how inflationary pressures are transmitted. The ARDL results confirm that international food prices, wage rates, agricultural GDP, and weighted average call money rate are major contributors to food inflation in the long run. The NARDL results show the significant asymmetric effects of money supply, wage rate, crude oil prices, international food prices, real effective exchange rate, and weighted average call money rate on food inflation in the long run. The findings of this study will provide valuable insights for policymakers and agricultural stakeholders in developing effective policies and strategies to manage food price inflation and ensure food affordability.

Suggested Citation

  • Sharma, Purushottam & Meena, Dinesh Chand & Anwer, Md. Ejaz, 2024. "Food Price Inflation in India: Determinants and their Asymmetric Impact," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344332, International Association of Agricultural Economists (IAAE).
    • Handle: RePEc:ags:cfcp15:344332
    DOI: 10.22004/ag.econ.344332
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