Abstract
This study analyzes the price fluctuations of cooking oil in the Indonesian consumer and wholesale markets using the Autoregressive Conditional Heteroskedasticity (ARCH) model across January 2018 to January 2024 period that encompasses the period of study. This study covered the period measuring from January 2018 to January 2024. As per conclusions drawn upon the tests for stationarity, the series has become non-stationary after a second difference. An analysis of the results indicates substantial and even large amounts. Consumer price’s ARCH (α) and GARCH (β) coefficients are 0.569707, and the coefficients for wholesale prices are 1.29 and -0.13 respectively. This indicates that there is the presence of persistent volatility (α + β > 0) in the market. In view of these results, it is very clear that certain policy measures need to be put in place. Such measures should include the stabilization of the delivery mechanism through proper stock management and strategic price mechanisms to avoid wide fluctuations in price. Two other factors that may help in price variations stability are increasing market openness and promoting location diversification of supply sources.
Published Version
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