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Energy Crisis and Productive Inefficiency: Micro-Evidence from Textile Sector of Faisalabad


  • Haider Ali

    (Pakistan Institute of Development Economics, Islamabad)

  • Muhammad Nawaz

    (Pakistan Institute of Development Economics, Islamabad)


This study measures productive inefficiency in the textile sector of Faisalabad due to recent energy crisis in Pakistan. Primary data is collected randomly from 125 firms of the industry. Results explain that these firms are facing huge production loss which varies from 23 to 65 percent in 8-hour shift and 21 to 60 percent in 10-hour shift. Spinning and textile firms are facing severe electricity outage while dyeing, chemical and processing firms have huge production losses due to gas shortage. The study further explains that 64 percent of the firms are willing to pay for uninterrupted energy supply and their willingness to pay varies on average in the range of PAK Rs 5 to 9 per unit of electricity.

Suggested Citation

  • Haider Ali & Muhammad Nawaz, 2013. "Energy Crisis and Productive Inefficiency: Micro-Evidence from Textile Sector of Faisalabad," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 52(4), pages 447-465.
  • Handle: RePEc:pid:journl:v:52:y:2013:i:4:p:447-465

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    Energy Crisis; Production Loss; Order Delays; Willingness to Pay;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • R34 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Input Demand Analysis


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