Drivers of rice price variation in Nigeria: A two-stage iterative ridge regression approach

Most studies on local rice in Nigeria were centred on increasing production, consumption or competitiveness with very few of them addressing the determinants of the price of rice in an economy. Filling this gap requires a study on the various factors that influence the price of rice. Food price instability is a frequent forerunner of macroeconomic shocks and political turmoil that can discourage long-run investment and curtail growth. In this study, secondary data were employed. The study used descriptive statistics tools to analyse the pattern of price variation over the period of 42 years in the study area. Similarly, various factors affecting price variation of rice were examined. The following recommendations were made: appropriate tax collection measures on producers should be implemented so as to curtail farmers from exploiting the masses by making excessive gains. Since the decrease in export results in an increase in price, the government should keep a balance between import and export to maintain the price of rice at a reasonable level. The price of rice can be reduced by the government when they implement measures to control the inflation rate in the economy. The government should put measures to regulate the quantity of land used by rice producers as well as to control the price of rice, since they both have a positive relationship