Estimating Food Demand System and Rural Household Welfare: A Case study from Pakistan
Lubna Naz (),
Munir Ahmad and
Ghulam Arif ()
Additional contact information
Lubna Naz: Pakistan Institute of Development Economics Islamabad
Munir Ahmad: Pakistan Institute of Development Economics, Islamabad
Business & Economic Review, 2018, vol. 10, issue 4, 55-82
This article adds to the existing literature by analyzing static and dynamic welfare impacts of food price changes for rural households in Pakistan. All three waves of Pakistan Rural Household Survey (2001, 2004, and 2010) were used. Lagrange Multiplier and of test on the coefficients of squared expenditure term (Likelihood Ratio test) were used to determine whether QUAIDS is an appropriate model or not. Nonlinear Seemingly Unrelated Regression (NLSUR) was used to estimate demand functions for eight food groups (Cereals, milk, and milk products, vegetables, cooking oil, pulses and other food). Results indicate inelastic expenditure elasticity of cereals in the pooled sample. Own price elasticities for all food groups, except other food, are smaller than zero during the entire sampled period (2001, 2004, 2010), and cereals are complimentary with meat and pulses, as suggested by cross price elasticity (uncompensated). Furthermore, results reveal that rural households needed a 28 percent increase in food expenditure and 26 percent increase in total expenditure to return to the previous level of welfare (year-2001).
Keywords: Cross-Price Elasticity; Lagrange Multiplier; Nonlinear Seemingly Unrelated Regression; Own-Price Elasticity. (search for similar items in EconPapers)
JEL-codes: C51 D11 I31 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bec:imsber:v:10:y:2018:i:4:p:55-82
Access Statistics for this article
More articles in Business & Economic Review from Institute of Management Sciences, Peshawar, Pakistan Institute of Management Sciences 1-A, Sector E-5, Phase VII, Hayatabad, Peshawar- Pakistan. Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Attaullah Shah ().