Open AccessEstimating Consumer Preferences for Food, Using Time Series Data of Pakistan
Author(s) -
Abid A. Burki
Publication year - 1997
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v36i2pp.131-153
Subject(s) - engel curve , econometrics , homogeneity (statistics) , economics , axiom , revealed preference , time series , series (stratigraphy) , panel data , preference , consumer demand , mathematics , statistics , microeconomics , price index , paleontology , geometry , biology
Consumer preferences for food and non-food items in Pakistanare frequently estimated by using data from the household surveys.However, structural change in consumer preferences, caused by changes intastes, can be studied by using the annual time series data, a timeseries of cross sections, or the panel data. This paper uses Pakistan’sannual time series disappearance data for eight food commodities from1972 to 1991 to study consumer behaviour. The existence and the natureof structural change is tested by using both the generalised axiom ofrevealed preference (GARP) and the first-difference LA/AIDS model. Itturns out that GARP tests are low-powered as tests of structural changeon our data-set. However, the results from the LA/AIDS model show ashift in consumer demand from gram (split) to chicken after 1982. Thedata set satisfies symmetry and homogeneity. The estimates of price andincome elasticities are also consistent with economic theory. Theimplications of these results for policy are also discussed.