Import elasticity of tea: a case of Pakistan
Pakistan is second largest importer of tea. It is based on the fact that negligible part of the consumption of tea is produced domestically. The import analysis of tea is significant to check the import bill. The paper empirically investigated the determinants of import of tea using annual time series data for the years 1977-2009 at the national level. We find that import of tea is positively influenced by GDP, domestic tea consumption and human population. While the domestic price of the tea and import duty on tea negatively impacts the import of tea. The findings indicate that import of tea cannot be significantly controlled by adjusting the variables of domestic price and import duty on tea. The point to the need for the policy makers is to decrease the import bill by changing the consumption behavior of the people and introducing the substitutes of tea which are domestically available.
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