IDEAS home Printed from https://ideas.repec.org/a/lje/journl/v17y2012i1p101-128.html
   My bibliography  Save this article

The Determinants of Food Prices in Pakistan

Author

Listed:
  • Henna Ahsan

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

  • Zainab Iftikhar

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

  • M. Ali Kemal

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

Abstract

Controlling prices is one of the biggest tasks that macroeconomic policymakers face. The objective of this study is to analyze the demand- and supply-side factors that affect food prices in Pakistan. We analyze their long-run relationship using an autoregressive distributed lag model for the period 1970–2010. Our results indicate that that the most significant variable affecting food prices in both the long and short run is money supply. We also find that subsidies can help reduce food prices in the long run but that their impact is very small. Increases in world food prices pressurize the domestic market in the absence of imports, which cause domestic food prices to rise. If, however, we import food crops at higher international prices, this can generate imported inflation. The error correction is statistically significant and shows that market forces play an active role in restoring the long-run equilibrium.

Suggested Citation

  • Henna Ahsan & Zainab Iftikhar & M. Ali Kemal, 2012. "The Determinants of Food Prices in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(1), pages 101-128, Jan-June.
  • Handle: RePEc:lje:journl:v:17:y:2012:i:1:p:101-128
    as

    Download full text from publisher

    File URL: http://121.52.153.179/JOURNAL/Vol%2017-1/06%20Ahsan,%20Iftikhar%20Kemal.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Trostle, Ronald, 2008. "Factors Contributing to Recent Increases in Food Commodity Prices (PowerPoint)," Seminars 43902, USDA Economists Group.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Food prices; ARDL estimation; Pakistan.;

    JEL classification:

    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lje:journl:v:17:y:2012:i:1:p:101-128. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shahid Salahuddin). General contact details of provider: http://edirc.repec.org/data/lsecopk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.