Open AccessNEXUS BETWEEN CONSUMER WELFARE AND MARSHALIAN’S DEMAND FUNCTION; EVIDENCE FROM PAKISTAN
Author(s) -
Gulzar Ali,
Sara Rafiq,
Ansa Javed
Publication year - 2020
Publication title -
pakistan journal of humanities and social sciences research
Language(s) - English
Resource type - Journals
eISSN - 2663-922X
pISSN - 2663-9211
DOI - 10.37605/pjhssr.3.1.9
Subject(s) - economics , nexus (standard) , consumption (sociology) , welfare , purchasing power , public economics , government (linguistics) , consumption function , consumer price index (south africa) , microeconomics , macroeconomics , production (economics) , market economy , monetary policy , social science , linguistics , philosophy , sociology , computer science , embedded system
Consumer welfare and their satisfaction is the primary and basic objective of any government, policy makers and economists. The theory of economics encircles from welfares of the consumers. In this regard, the demand function has persuasive role in determining the welfare through purchasing power. That’s why, the consumer welfare is measured from Marshallian’s demand through Indirect Utility Function during 1980-2017 for Pakistan. The variables are stationary at level and in analytical technique, the NLS and ARMA (Least Regression Analysis) method was operative through econometric views (E-Views) software. The result indicates that income of the consumer has significant and positive effect, while price of goods has significantly negative effect on the consumer welfare and utility in case of Pakistan. Further, the long run association of consumption, income and consumer welfare was found. This study recommends that incremental efforts are required by the government to bring stability in the prices of goods, policies must aim and focus on provision of employment and income generating activities, control of income inequality and minimize income class disparities to maximization welfare of the individuals living in different regions and in societies of Pakistan.