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An Estimation of Structural Import Demand Function for Pakistan

Author

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  • Abdul Rashid
  • Tayyaba Razzaq

Abstract

This paper estimates the structural import demand function for Pakistan using a theoretical framework developed by Emran and Shilpi (2010). ARDL and DOLS techniques are used to estimate the log-run price and income elasticities. The results of cointegration analysis provide strong evidence of the existence of a long-run stable relationship among the variables included in the model. The estimates for price and income elasticity have correct sign and are statistically significant. The coefficient of scarcity premium variable is negative and statistically significant, indicating a binding foreign exchange constraint on imports in Pakistan for pre-trade liberalization period.

Suggested Citation

  • Abdul Rashid & Tayyaba Razzaq, 2013. "An Estimation of Structural Import Demand Function for Pakistan," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 156-175.
    • Handle: RePEc:bas:econst:y:2013:i:2:p:156-175
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    References listed on IDEAS

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    1. M. Shahe Emran & Forhad Shilpi, 2010. "Estimating an Import Demand Function in Developing Countries: A Structural Econometric Approach with Applications to India and Sri Lanka," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 307-319, May.
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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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