Estimating consumer demand of major food items in Pakistan: A micro data analysis

Consumer demand for food items in pakistan and its dynamic pattern has attracted the attention of various researchers. all of them had employed various functional forms for estimating consumer demand preferences and trends. this study focused on descriptive and econometric analysis of household integrated expenditure survey (2007-2008). food consumption and expenditure patterns for seven food items (i.e. rice,wheat,chicken,milk,mutton,fish and oil) for rural and urban areas of pakistan were analyzed. the linear approximated version of almost ideal demand system (laaids) was used in parametric framework. the model was used to estimate the parameters of food demand equations as well. the uncompensated ownprice elasticities were negative for all included food stuffs and their absolute values were lower than unity except for mutton (1.108) and fish (1.775) in rural areas. the values of the cross-price elasticities revealed both the substitution and complementary relationships. the estimates of price and income elasticities were also consistent with economic theory. the expenditure elasticities were indicating that fish (1.20) was luxury good for rural areas and mutton both for urban and rural regions with income elasticities 1.11 and 1.23,respectively.