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Development of Supply and Demand Functions of Pakistan’s Wheat Crop

Author

Listed:
  • Muhammad Zulfiqar

    (Kohat University of Science and Technology, Kohat, Pakistan.)

  • Anwar F. Chishti

    (Muhammad Ali Jinnah University, Islamabad, Pakistan.)

Abstract

A simultaneous-equations model was used to capture the supply and demand functions for Pakistan’s wheat sector at the national level. This model reflects the fact that Pakistan’s domestic wheat supply is priceresponsive and positively affected by the use of nutrient fertilizers. While price appears to be a statistically significant factor on the supply side, it is statistically insignificant on the demand side. Population size appears to be very significant in determining wheat demand. The wheat import supply seems to be influenced by the current world wheat price, current world wheat supplies, Pakistan’s domestic consumption in previous years, and domestic supply in previous years. We recommend that policymakers allow market forces to play a role in the wheat economy in a way that protects producers from adverse market conditions. The availability of various nutrient fertilizers should be central to policies on future inputs use. Work is also needed on wheat alternatives so that the country’s dependence on wheat is eased as much as possible.

Suggested Citation

  • Muhammad Zulfiqar & Anwar F. Chishti, 2010. "Development of Supply and Demand Functions of Pakistan’s Wheat Crop," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(1), pages 91-102, Jan-Jun.
    • Handle: RePEc:lje:journl:v:15:y:2010:i:1:p:91-102
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    References listed on IDEAS

    as
    1. Peter A. Cornelisse & Bart Kuijpers, 1987. "A Policy Model of the Wheat and Rice Economy of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 26(4), pages 385-400.
    2. Harold Alderman, 1988. "Estimates of Consumer Price Response in Pakistan using Market Prices as Data," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 27(2), pages 89-107.
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    More about this item

    Keywords

    Wheat; supply and demand; Pakistan.;
    All these keywords.

    JEL classification:

    • C59 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Other
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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