Disintegration of Price Ordered Probit Model: An Application to Prices of Cereal Crops in Nigeria

Swindling in prices of comestible cereal crops positively or negatively has effect on incomes and earnings, because they are the most consumable farm harvests. The instability in prices of cereal crops undoubtedly affects consumers' demands and purchasing power; producers' profitability margin. The higher their prices, the more profit accrued by farmers and the panicky effect on both domestic markets and international prices, especially to depending countries. Due to this, the Price Ordered Probit model was considered due to its ability to measure price changes of commodities. We estimated the parameters embedded in the Price Ordered Probit model via Generalized Linear Method, thereafter disintegrated the model into three components with associated estimated parameters for adequate measurement of unsteadiness in prices. The model was subjected to ten (10) instability prices of cereal crops; maize, rice, sorghum, millet, cowpea, groundnut, beans, wheat, and cassava collected from the Department of Food and Strategic Reserve, in Kano State, Nigeria. It was unveiled that the probabilities of changes in prices of rice, maize, sorghum and millet due to dependent increment in the previous years are 0.83 (83 %), 0.30 (30 %), 0.35 (35 %) and 0.45 (45 %) respectively. Whereas, the likelihoods of the monthly increment in changing of prices due to subsequent prices of g-corn, cowpea, groundnut, beans, wheat and cassava are 0.382 (38.2 %), 0.851 (85.1 %), 0.450 (45 %), 0.471 (47.1 %), 0.123 (12.3 %) and 0.670 (67 %) respectively.