Analysing the Impact of Macroeconomic Variables on Food Inflation: A Robust Regression Model Approach: Page 8- 16

Abstract

This study investigates the influence of macroeconomic variables on food inflation using a robust regression modeling approach. The period of study was from 2004 to 2023. Data on macroeconomic variables and food inflation rates were collected from the Nigeria Bureau of Statistics (NBS) and the Central Bank of Nigeria (CBN). The data were analyzed to quantify the impact of each factor on food inflation dynamics. The regression model derived from the analysis reveals that the positive coefficient of 0.631 indicates that an increase in the interest rate is associated with higher food inflation rates. Crude oil price influence with a coefficient of 0.084 has a modest positive effect on food inflation, highlighting the interconnectedness of energy costs and food pricing. Further, the coefficient of 0.020 suggests that changes in the exchange rate also contribute to food inflation variations, reflecting the impact of currency fluctuations on import costs and food prices.