Published in Scientific Papers. Series "Management, Economic Engineering in Agriculture and rural development", Vol. 16 ISSUE 4
Written by Udegbunam Edwin CHINONSO, Onu Inyanda JUSTICE
This is time series paper modelling Nigeria’s urban and rural inflation using monthly CPI data from January 2001 to December 2015. Consumer Price Index (CPI) is a measure of the average change overtime in the prices of consumer items, that is, goods and services that people buy for day-to-day living. Box-Jenkins ARIMA Model was used to model 180 monthly CPI data and was forecasted to 29 CPI monthly data which actually fitted with two quarterly CPI data. The model identified that the data are dependent and not identically distributed, both the mean and variance are increasing through time. ARIMA (0, 1, 0), ARIMA (0, 1, 13) were selected and proved to be correct, residuals were showing insignificant auto-correlated residual and followed a normal distribution with mean zero and constant variance. This research finds of high inflation in urban and rural areas of Nigeria which serves as an indicator to the economy situation of Nigeria.
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