TITLE:
India’s Tea Price Analysis Based on ARMA Model
AUTHORS:
Hong Liu, Shuang Shao
KEYWORDS:
ARMA Model, Forecast Analysis, Price Mechanism, Tea Price
JOURNAL NAME:
Modern Economy,
Vol.7 No.2,
February
16,
2016
ABSTRACT: 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.