Abstract
The purpose of this study is to measure the food price volatility for sixteen food commodities [beef, chicken, pulse mash, pulse moong, pulse masoor, rice iri, wheat, tomato, potato, onion, ginger, garlic, milk, egg, sugar and tea] for fourteen main cities of Pakistan [Bahawalpur, Faisalabad, Hyderabad, Islamabad, Karachi, Khuzdar, Lahore, Multan, Peshawar, Quetta, Rawalpindi, Sargodha, Sialkot and Sukkur]. Furthermore, to provide comparative analyses of volatilities among different cities GARCH (1,1), I GARCH (1,1) and standard deviation techniques are employed on the monthly food price data for the period July 2002 to June 2016 collected from various issues of Pakistan Bureau of Statistics for fourteen cities. The results elaborate that volatility is exist in the series of food prices with strong heterogeneity among cities. It is suggested that the government should develop a mechanism to keep a check on the variation in prices and design separate policies for each city according to the volatility in the prices of food commodities in that city.
Key words: Food Prices, Volatility, GARCH, IGARCH, Standard Deviation.
