FOOD DEMAND PATTERNS IN PAKISTANI PUNJAB

Flexible LA-AIDS model is used to examine food demand patterns in Pakistani Punjab. The model is also estimated for rural and urban households using the Household Integrated Economic Survey of Pakistan consisting of 5972 households of Pakistani Punjab. Food products are categorized into eight groups including wheat, rice, fruits, vegetables, milk, cooking oil, meat, and other food products. Results show that households in both rural and urban areas with head of family having agriculture as profession consume less of all foods with the exception of wheat. Households in both rural and urban areas with literate head of family consume more of all food products with the exception of vegetables and wheat. Both compensated and uncompensated own price and expenditure elasticities are significant and have the expected signs for both rural and urban consumers. The demand for all eight food groups is price inelastic with wheat having the most price inelastic demand. All of the expenditure elasticities are positive suggesting that all goods are normal with the largest expenditure elasticities found for milk followed by fruits, other food products, meat, rice, vegetables, wheat and cooking oil. The study recommends further investigation to study the price and income responsiveness of poor and rich across rural and urban areas in the four provinces of Pakistan to understand food demand in the country.