Analysis of Factors Affecting Production and Demand for Red Chili (Capsicum Annuum L)
Dyah Erni Widyastuti, Jabal Tarik Ibrahim and Zul Mazwan
University Muhammadiyah of Malang
Abstract
Red chili is one of the important commodities, for household consumption and industrial raw materials in Indonesia. The imbalance between demand and supply and the condition of the season, causes price fluctuations. Fluctuations in the price of red chili always occur and contribute to inflation. This study analyzes the factors that influence production and demand, as well as the elasticity of demand for red chili. Data analysis using multiple linear regression models with secondary data from 2007-2016. The research variables are production, red chili prices, cayenne prices, red onion prices, red chilli imports, exports and demand for red chili. The research results represent the production of red chili is a function of the production of the previous period, harvested area and selling price at the producer level. The demand for red chili is influenced by the price of red chili, the price of cayenne pepper, consumer income and population, while the price of shallots and imports has no effect. Based on the analysis, the elasticity of demand for red chili is normal and inelastic goods against price changes.
Keywords: red chilli, inflation, demand elasticity
Topic: Environmentally Sustainable Agriculture