Dynamics of Rice Prices in Modern and Traditional Markets in East Java

¹ Digital Agribusiness, Food Security Faculty, State University of Surabaya, Indonesia
² Office Administration Education, Economica and Business Faculty, State Univesity of Surabaya
³ Islamic Economic, Economica and Business Faculty, State Univesity of Surabaya

^* Corresponding author: ayupriyambodo@unesa.ac.id

Abstract

This study looks on the volatility of rice prices in East Javan traditional and contemporary marketplaces and how it affects inflation. The study uses time-series data from 2018 to 2025, measuring price volatility using the ARCH/GARCH model and addressing non-stationarity and spurious regression using the Error Correction Model (ECM). The findings show that changes in rice prices have a substantial impact on inflation, especially for households with low incomes. Global market movements, weather patterns, governmental regulations, and domestic production are important variables that affect volatility. To reduce inflation and guarantee food security in East Java, the report suggests strengthening supply chains, boosting market transparency, and improving price stability programs.