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Surmising Consumer Demand System & Structural Changes Using Time Series Data

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  • Aziz, Babar
  • Malik, Shahnawaz

Abstract

Consumer demand for food and non-food items in Pakistan has attracted the attention of various researchers. They have employed different parametric approaches, like single equation, double log models, linear expenditure system and extended linear expenditure system. Most of the studies were based on household income and expenditure survey data. Like other household surveys, HIES data do not give information about prices, due to which price elasticities could not estimated. This task could not be accomplished partly because, in order to examine the existence and the nature of structural change and estimation of price elasticities, time series data was required. In this context the present study is a step ahead. In this analysis time series data has been used on meat group from 1950-51 to 2003-2004. We estimated the linear approximation of almost ideal demand system (LA/AIDS). The model is used to estimate the parameters of meat demand equations. Furthermore, the existence and the nature of the structural change is checked by using LA/AIDS. The results from LA/AIDS model show a shift in consumer demand in case of chicken in 1991-92. Price and expenditure elasticities have also been calculated. The estimates of price and income elasticities are also consistent with economic theory.

Suggested Citation

  • Aziz, Babar & Malik, Shahnawaz, 2006. "Surmising Consumer Demand System & Structural Changes Using Time Series Data," MPRA Paper 22911, University Library of Munich, Germany, revised 2006.
    • Handle: RePEc:pra:mprapa:22911
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    References listed on IDEAS

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    Cited by:

    1. Ghulam Yahya Khan & Syeda Nazish Rashid & Salik Mehboob, 2018. "Empirical Analysis of Household Energy Demand Using Almost Ideal Demand System: A Case Study of District Muzaffarabad, Azad Kashmir, Pakistan," Energy Economics Letters, Asian Economic and Social Society, vol. 5(1), pages 12-22, March.
    2. Lal Almas & Mehreen Zaid Ullah & Hina Fatima & Lal K. Almas & Mallory K. Vesta & Nasim Akhter, 2017. "Estimating Demand Elasticities for Aggregate Food Groups using QUAIDS and Pooled HIES Data," EcoMod2017 10541, EcoMod.
    3. Khurram SHAHZAD* & Muhammad Nadeem SARWAR**, 2018. "Analysis of Food Demand Patterns of Sindh Province, Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 28(1), pages 147-168.

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    More about this item

    Keywords

    Consumer Demand: Empirical Estimation: LAAIDS: Time Series Data: Pakistan;

    JEL classification:

    • D0 - Microeconomics - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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