Author(s)

Hong Liu¹, Shuang Shao²

¹College of Economics, Jinan University, Guangzhou, China.
²College of Economics & Management, South China Agricultural University, Guangzhou, China.

In this paper, the ARMA model is used to analyze the sample of India’s weekly tea auction price in the year 2013 to 2014. First, the data were tested for stability, autocorrelation and partial correlation test, and the ARMA (1, 1) model was established. Then, the parameters of the model are determined, and the residuals are tested by white noise. The test results are satisfactory and meet the forecast requirements. Finally, we use the model to predict the tea price of the last week in 2014 and the tea price of the first two weeks in 2015, and the prediction error is small. Therefore, this paper suggests that a mature tea auction market should be established in China which is a big exporter of tea production, and we should set an early warning mechanism for the price of tea, and use the price information to guide the production of tea cultivation and sales activities.

ARMA Model, Forecast Analysis, Price Mechanism, Tea Price

Liu, H. and Shao, S. (2016) India’s Tea Price Analysis Based on ARMA Model. Modern Economy, 7, 118-123. doi: 10.4236/me.2016.72014.