Davoud Mahmoudinia, Mohaddeseh Khodadadi,
Volume 0, Issue 0 (1-2026)
Abstract
The food price index plays a significant role in the Iranian household budget and food security. In this study, we analyze the internal and external factors affecting the food price index in both rural and urban households. To achieve this, we employed various methods, including the Bayesian Vector Autoregression (BVAR) model and Quantile Regression (QR), to examine these effects on a monthly basis from 2004 to 2024. Statistics indicate that by 2025, the food and food products sector will account for the second-largest share of the household consumer goods basket. After conducting unit root tests, cointegration analysis, optimal lag determination, and stability tests for the model, we found that the impulse response function revealed certain dynamics. Specifically, shocks from liquidity and the transportation price index positively impact both food inflation indicators, with a more pronounced effect on the food price index of rural households. Conversely, in the short term, the agricultural product price index has a stronger and more positive effect on the urban household index. Regarding external factors, our results indicate that the impact of oil shocks on the food price index is greater in urban areas than in rural areas, while the influence of food prices in the rural sector due to global food price shocks is more significant than in the urban sector.
