FOOD PRICING

Food Pricing

Abstract

Food prices are clearly on the rise. Food production is of vital importance for the development of people in dignity and life opportunities. The food prices are reaching dangerous levels and this escalation suffer most are low income people. The increase in food prices due to low production levels, but at the same time, they have to do with the lack of efficient policies to encourage production. The purpose of this study is to determine the impact of rising prices of food items on the consumers. In addition, this study will also highlight the factors that why the prices of the food increase and what is the basis of food pricing decision making.

Table of Content

Abstract2

Introduction4

Statement of Purpose5

Significance of the Study5

Research Questions6

Methodology6

Research Design6

Sample7

Procedure7

Study Design8

Data Analysis8

Generalization8

Implication9

Limitations9

References10

Food Pricing

Introduction

According to the United Nations Food and Agriculture (known by the acronym FAO), the index of food prices in February 2011 rose to its highest level since the start of data collection, in 1990. Establish one thing from the start: for once, the word "explosion" - that sometimes tends to sprinkle a little easier - probably not too hard. Food prices, which have fed the popular uprisings in the Middle East, are clearly on the rise. Food production, provision timely and stable prices that are related to an economic variable such as wages, is of vital importance for the development of people in dignity and life opportunities (Hoek, 2005). A World Bank report argues that the rising price of food has led to nearly 44 million people into poverty in developing countries since June last year, while the cost of food continues to rise (Seaton, 2006). The food prices are reaching dangerous levels and this escalation suffer most are low income people. The increase in food prices due to low production levels, but at the same time, they have to do with the lack of efficient policies to encourage production.

Throughout history, governments have attempted to control prices through the use of price ceilings and price floors. A price ceiling is a maximum price that the seller of any good or service may charge. For example, if the U.S. government declared that no street vendor could charge more than $2.00 for a hot dog, a price ceiling would be in effect. A price floor, by contrast, is a minimum price that the seller may charge. If the government declared that hot dogs could not be sold for any less than $5, a price floor would be in effect (Bernard, 2005). While price ceilings and price floors can be necessary in certain situations, most economists strongly disapprove of them because they interrupt the natural processes by which the economy regulates itself.

Statement of Purpose

The purpose of this study is to determine the impact of rising prices of food items on the consumers. In addition, this study will also highlight the factors that why the prices of the food increase and what is the basis of food pricing decision making. For this purpose a survey will be conducted ...