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Fuel Demand Elasticities in Pakistan: An Analysis of Households' Expenditure on Fuels using Micro Data

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  • Nadeem A. Burney

    (Pakistan Institute of Development Economics (PIDE), Islamabad.)

  • Naeem Akhtar

    (Pakistan Institute of Development Economics (PIDE), Islamabad.)

Abstract

This study aims to examine the pattern of households' expenditure on fuel consumption in Pakistan using the data of Household Income and Expenditure Survey (1984-85). Price and income elasticities have been estimated by applying the Extended Linear Expenditure System. It is found that the expenditure pattern of the rural households is different from the urban households, with the rural households spending proportionately more on fuels. The estimates of the income elasticities imply that all fuels are a necessity for both urban and rural households. The price elasticities of different fuels are found to be extremely low, implying that the consumption of fuels in Pakistan is highly price inelastic.

Suggested Citation

  • Nadeem A. Burney & Naeem Akhtar, 1990. "Fuel Demand Elasticities in Pakistan: An Analysis of Households' Expenditure on Fuels using Micro Data," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 29(2), pages 155-174.
    • Handle: RePEc:pid:journl:v:29:y:1990:i:2:p:155-174
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    File URL: http://www.pide.org.pk/pdf/PDR/1990/Volume2/155-174.pdf
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    References listed on IDEAS

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    1. Solow, John L, 1987. "The Capital-Energy Complementarity Debate Revisited," American Economic Review, American Economic Association, vol. 77(4), pages 605-614, September.
    2. Powell, A A, 1973. "An ELES Consumption Function for the United States," The Economic Record, The Economic Society of Australia, vol. 49(127), pages 337-357, September.
    3. Constantino Lluch & R. Williams, 1975. "Consumer Demand Systems and Aggregate Consumption in the US: An Application of the Extended Linear Expenditure System," Canadian Journal of Economics, Canadian Economics Association, vol. 8(1), pages 49-66, February.
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    Cited by:

    1. Riaz, Khalid, 1994. "Food consumption patterns in rural Pakistan," ISU General Staff Papers 1994010108000011501, Iowa State University, Department of Economics.
    2. Irfan, Muhammad & Cameron, Michael P. & Hassan, Gazi, 2018. "Household energy elasticities and policy implications for Pakistan," Energy Policy, Elsevier, vol. 113(C), pages 633-642.
    3. Misbah Aslam & Eatzaz Ahmad, 2018. "Impact of Ageing and Generational Effects on Household Energy Consumption Behavior: Evidence from Pakistan," Energies, MDPI, vol. 11(8), pages 1-20, August.
    4. Rehana Siddiqui & Rashida Haq, 1999. "Demand for Energy and the Revenue Impact of Changes in Energy Prices," PIDE Research Report 1999:2, Pakistan Institute of Development Economics.
    5. Sajjad & Zia Ur Rahman, 2021. "A micro‐level data analysis of household energy demand in Khyber Pakhtunkhwa, Pakistan: An application of linear approximate almost ideal demand system," Growth and Change, Wiley Blackwell, vol. 52(1), pages 518-538, March.
    6. Khan, Muhammad Arshad & Abbas, Faisal, 2016. "The dynamics of electricity demand in Pakistan: A panel cointegration analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 1159-1178.
    7. Nazish Tehseen & Sheraz Ali Khan, 2017. "Fuel Demand Elasticities for Energy and Environmental Policies: Evidence from Household Data in Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 6(3), pages 117-129, September.
    8. Muhammad Atta-ul-Islam Abrar & Muhsin Ali & Uzma Bashir & Karim Khan, 2019. "Energy Pricing Policies and Consumers’ Welfare: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 24(1), pages 1-28, Jan-June.
    9. Muhammad Omer, 2018. "Estimating Elasticity of Transport Fuel Demand in Pakistan," SBP Working Paper Series 96, State Bank of Pakistan, Research Department.
    10. Waleed, Khalid & Mirza, Faisal Mehmood, 2020. "Examining behavioral patterns in household fuel consumption using two-stage-budgeting framework for energy and environmental policies: Evidence based on micro data from Pakistan," Energy Policy, Elsevier, vol. 147(C).
    11. Sohail J. Malik & Naeem Sarwar, 1993. "Some Tests for Differences in Consumption Patterns: The Impact of Remittances Using Household Income and Expenditure Survey Data of Pakistan 1987-88," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 699-711.
    12. Zahoor Ul Haq & Sajjad & Javed Iqbal, 2018. "Households Energy Consumption Pattern and Demand in Pakistan," Global Social Sciences Review, Humanity Only, vol. 3(1), pages 339-354, March.
    13. Khalid Waleed & Faisal Mehmood Mirza, 2023. "Examining fuel choice patterns through household energy transition index: an alternative to traditional energy ladder and stacking models," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6449-6501, July.
    14. Theresa Chaudhry, 2010. "Estimating Residential Electricity Demand Responses in Pakistan’s Punjab," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(Special E), pages 107-138, September.
    15. Aslam, Misbah & Ahmad, Eatzaz, 2023. "Untangling electricity demand elasticities: Insights from heterogeneous household groups in Pakistan," Energy, Elsevier, vol. 282(C).
    16. Muhammad Arshad Khan & Abdul Qayyum, 2009. "The demand for electricity in Pakistan," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 33(1), pages 70-96, March.
    17. Awal, M. A. & Sabur, S. Abdus & Mia, M. I. A., 2008. "Estimation Of Vegetable Demand Elasticities In Bangladesh: Application Of Almost Ideal Demand System Model," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 31(1-2), pages 1-26, December.

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