Disaggregated Import Demand Functions for Pakistan

Abstract

This paper estimates demand elasticities of relative prices and, those with respect to the activity variable for selected imports of Pakistan at different levels of aggregation for the 1969-70 - 1983-84 period. The relative price elasticities, adjusted for tariffs, are found to be quite small and distinctly different from those estimated for developed countries. Elasticities with respect to the activity variable are on the higher side which may reflect the increased outward orientation of the economy during this period. We have also found evidence which supports the argument that import substitution of consumer and capital goods has led to increased import dependence on inputs.