Pakistan Institute of Development Economics



An Investigation into the Farm Households Consumption Patterns in Punjab, Pakistan

In the present study, the consumption data of paddy and wheat growing farm households were analysed using the Almost Ideal Demand System (AIDS) model, incorporating the household composition in addition to the usual price/income variables. Although the general restrictions of demand theory were rejected, the overall results were not seriously out of line of a priori expectations. All the own-price elasticities were negative and most of them were significant. Paddy and wheat were found to be gross complements in consumption whereas meat and pulses emerged as gross substitutes. Dairy products and meat were regarded as luxuries by the sample farm households and expenditure on these items was curtailed in response to any addition to household size. Significant quantitative dietary impacts were found associated with change in the age composition of farm households. A more detailed analysis of consumption behaviour of rural families may be merited; this may explore alternative groupings of consumption goods, additional socio-economic factors or use of panel data.

Trevor Young, Umar Farooq, Muhammad Iqbal