THE PAKISTAN DEVELOPMENT REVIEW
A Note On Consumption Patterns in the Rural Areas of East Pakistan
The main purpose of this paper is to present estimates of income elasticities for various commodity groups in East Pakistan. To date no such studies have been conducted in that province; and estimates made in other areas of the subcontinent have only limited applicability. Analysis of consumption patterns is essential for development planning because priorities and investment targets have to be based on demand forecasts for different commodities. Forecasting demand requires, among other variables, reliable estimates of income elasticities. In addition, knowledge about elasticities can be useful in deciding taxation policies and other controls over consumption. Further, in countries like Pakistan where large quantities of surplus foods are imported under the United States PL 480 programme, knowledge of income elasticities and regional patterns of consumption is important to permit effective utilization of these imports for economic development.