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Citation Information

Type Journal Article - Academic Research International
Title Estimation of urban-rural expenditure and size elasticities of food items in Pakistan: evidence from PSLM data
Author(s)
Volume 3
Issue 2
Publication (Day/Month/Year) 2012
Page numbers 474-481
URL http://www.savap.org.pk/journals/ARInt./Vol.3(2)/2012(3.2-61).pdf
Abstract
This study aims at the determination of the household consumption pattern of food items
among different income groups in urban and rural of Pakistan and estimation of food
expenditure and household size elasticities. The study evaluates the household food demand
patters for various income groups in urban and rural area of Pakistan. Pakistan Social and
Living Standard Measurement Survey (PSLM) 2007-08 data collected by Federal Bureau of
Statistics (FBS), Government of Pakistan, Islamabad are used for the analysis purpose. Engel
(Expenditure) elasticities are a powerful research tool in the analysis of household analysis. If
expenditure on a certain item is proportional to income or total expenditure then the income
elasticity of demand, better known as Engel elasticity is unity. The food expenditures are the
sum of expenditures by each household on the following commodity groups: cereals, pulses,
fruits, vegetables, dairy products, chicken, meat, fish, condiments, sugar, edible oils, drinks
and miscellaneous food products. The household size and income elasticities are estimated to
explain the food consumption trends in Pakistan. The results of the study indicate that all the
income and household size elasticities are positive and significant at one percent level of
significance. Results of the study indicate that the urban food consumption is higher in the
upper income group (IG) while households belonging to other classes of rural area are more
food responsive. Urban households depict higher size elasticities in overall, lower IG, lowermiddle
IG and middle IG whereas households belonging to upper-middle IG and upper IG of
rural area are also more food responsive.

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