Spatial analysis of food inflation in Iran

It is expected that inflation in a country with one currency is convergent in all regions. This has been associated with “convergence” directly. In policymakers’ viewpoint, convergence is a serious topic. Although the topic of inflation is investigated in macroeconomics, some inflation indexes, for instance inflation of food prices has attracted special attention. Generally, the issue of food inflation convergence has been less considered. The present study seeks to present an analysis of inflation distribution dynamisms in the provinces in Iran using the data on price indexes of consumer products and services during the time period April 2007-March 2013. In this study, each province is considered independently. Therefore, unique information is obtained which is applied in estimation and explanation of dynamisms of inflation changes. “Kernel conditional density” estimator was employed to analyze distribution dynamisms and two graphic methods were used to visualize “conditional density estimators”. It was shown in the study that there is no “spatial dependence” among the provinces and the hypothesis regarding the existence of independence of provinces is not rejected but there are convergent trends among the provinces.