Ramadan Effect on Price Movements: Evidence from Pakistan

Muhammad Akmal () and Muhammad Usman Abbasi ()
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Muhammad Akmal: State Bank of Pakistan
Muhammad Usman Abbasi: State Bank of Pakistan

No 32, SBP Working Paper Series from State Bank of Pakistan, Research Department

Abstract: This paper attempts to verify the widespread perception that general price level tends to rise due to the month of Ramadan in Pakistan. For this purpose, the ARIMA methodology (simple and extended form), along with simple graphical and scenario analysis, has been applied on the monthly data for overall, food and non-food indices of consumer prices in Pakistan from July 1991 to December 2008. Contrary to the general perception, we could not find any evidence of systematic acceleration in overall CPI, food and non-food price levels in the month of Ramadan in Pakistan. The results can be explained by price hikes well before the start of the holy month and government activism in regulating prices of essential food items in Ramadan. However, we do find a significant positive effect on the prices of fruits due to Ramadan.

Keywords: Ramadan; CPI; ARIMA. (search for similar items in EconPapers)
JEL-codes: C22 E31 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2010-02
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Citations: View citations in EconPapers (5)

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