RELATIONSHIP EXISTING AMONG NIGERIA URBAN AND RURAL CONSUMER PRICE INDEX (CPI)

This is time series analysis of Nigeria urban CPI and rural CPI to find out whether there exist relationship among urban and rural areas inflation. The CPI uses data from survey of consumption pattern of households to produce a timely and precise average price change for the consumption sector of any economy like the Nigerian economy. A total of 180 samples were used from monthly urban and rural CPI data from January 2001 to December 2015. Johansen Cointegration Test and Granger Causality Test were carried on, Vector Autoregression VAR model constructed to find out that there exist relationship among Nigeria Urban and Rural All item Consumer Price Index (NURACPI). Finally, impulse response function was used to check the response of urban (rural) CPI to the impulse of rural (urban) CPI and they were positive. This study finds out that there is high inflation rural area of Nigeria than urban area, the possible causes of it and how they affected each other.