Forecasting of onion price in Patna district through ARIMA model

Abstract

The present study entitled “Forecasting of onion price in Patna district in Bihar through autoregressive Integrated Moving Average (ARIMA) model”. Forecasting of onion price plays an important role in many decisions by policy maker. The secondary data of onion price were collected for 2002 to 2015 from Agriculture marketing (agmarknet.gov.in). The data from 2002 to 2015 were used for analysis of forecasting onion price and validity tests were also calculated.After study, it was found that the ARIMA (1,0,0) model is best fitted among all the models namely ARIMA (0,0,0), ARIMA (0,0,1), ARIMA (0,1,1), ARIMA (0,1,2), ARIMA (1,0,1), ARIMA (1,0,2), ARIMA (2,0,0), ARIMA (2,0,1), ARIMA (2,1,0), ARIMA (2,1,1), ARIMA (2,1,2).The parameters of all these models were computed and tested for their significance. Various statistics were also computed for selecting the adequate and parsimonious model i.e., t-test and chi-square test. This is supported by low value of MAPE, MAE, RMSE, BIC for forecasting of onion price in Patna district of Bihar. Forecasting of onion price for the next four years were calculated by the selected ARIMA model. The results showed that there was a lot of fluctuation in onion price.