Breakfast Price
A time series analysis of the most important meal of the day
February 2022 - May 2022
Time series of the price of 1lb of banana from 1995 - 2022
Ever since COVID-19 started, the market has experienced major inflation in prices, most notably grocery prices. Since breakfast is the most important meal of the day and is usually comprised of the most common grocery items, our team wants to understand how the price of bananas, milk, bread, eggs, and bacon (a basic American breakfast) changes throughout the years and using such information to predict the average cost of breakfast for 2022-2023.
For the full project, please visit: Breakfast Price.
Dataset
We pulled our data from the US Bureau of Labor Statistics website, which contains time series information about all goods captured by the Consumer Price Index. This data is not seasonally adjusted, the price is measured on a monthly basis, and the data goes back to 1980 for four of our items (excluding milk). Due to this fact, and a handful of missing values, we set July 1995 as the start date for our analysis across all five time series models.
Theory and Analysis
Using R, our team runs different tests and models like Decomposition to test for seasonality, linear and GLS model, AR, ARIMA, and SARIMA in order to find the best-fitted model for each time series.
Results
From the analysis, our team discovers that:
Eggs and Bacon have high volatility and high seasonality, Bread has low seasonality and strong trend, and Milk is subjected to fluctuations.
If your breakfast is comprised of 2 slices of bread, 2 eggs, 1 banana, 1 cup of milk, and 15 grams of bacon, our team predicts that the weekly breakfast cost is the lowest during July 2022 at $7.75 and the highest during March 2023 at $7.88
What I Learned
Technical Tools
I learned how to run and perform different time series models and tests like decomposition, GLS model, AR, ARIMA, SARIMA, residuals plot, ACF, and PACF in order to find the best-fitted model for time series.
For more details on this project, please visit Breakfast Price.
Residual Plot of Egg Price Time Series
Overview
In this project, I was in charge of finding the time series data for each breakfast item and cleaning said data sets. On top of that, I also performed the time series data analysis for the price of Bacon, which includes testing for seasonality/trend and creating a linear/GLS model to check for autocorrelation. Three different models were performed (AR(p), ARIMA, and GARCH) in order to predict the price of Bacon from April 2022 to March 2023. Finally, I summarized all the predictions made by my teammates to predict the total weekly cost of a standard breakfast from April 2022 to March 2023.