The effect of climate variability on price volatility for selected food products in Jakarta Anisa Dwi Utami, Harmini, Eva Yolinda Aviny
Department of Agribusiness, Faculty of Economic and Management, IPB University
Abstract
Stabilization of food prices has become the main policy agenda for many developing countries including Indonesia, bearing in mind that high price volatility can disrupt food security. In the context of food security, food sufficiency does not only depend on food availability but also on financial access to food, especially for the poor. Assuming that food price volatility may relate to risks of the agricultural production systems, this study aims to investigate the effect of climate variability on the price volatility of selected food products in Jakarta the capital city of Indonesia. For this reason, this study occupied daily serial data for 3 years starting from 2020-2022. The GARCH-X model was employed to estimate the food price volatility along with climate indicators as the exogenous variables. The empirical findings have confirmed that climate variability has significantly influenced the food prices volatility in Jakarta.
