Fluctuations and Volatility of White Eggs Consumer Prices in the Mexico Valley

Abstract

Objective: To develop a time series model and analyze the characteristic fluctuations of the average white eggs consumer prices in the Mexico Valley (AWECP), quantifying the seasonal and cyclical fluctuations of said prices. Design/methodology/approach: A Moving Average Time Series Smoothing method was used to reduce the variation of a data set, and separate cyclical, seasonal, and OLS variations to calculate the trend line. Results: The Seasonal Component (SC) indicates that in autumn-winter the AWECP is volatile above the annual average by 6.3 % while in spring-summer it declines by 9.13 % on average. The price volatility is largely explained by external factors and the biological process of poultry animals throughout one year. The cyclical component (CC) was 34 months and occurs irregularly. Limitations on study/implications: This research focused on finding the SC, T, and CC, but not their respective indices. To make short-term forecasts, it is necessary to calculate the indices and compare them to other time series analysis methodologies. Findings/conclusions: The analysis of the AWECP in the Mexico Valley indicates the presence of SC and an upward CC trend in the time series. The AWECP volatility has harmful effects on the basic basket of the middle and lower-class population in the Mexico Valley given that this food is the most complete, cheap, and accessible source of animal protein in the Mexican market.