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Pakistan's Export Demand Income and Price Elasticity Estimates: Reconsidering the Evidence

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Author Affiliations

  • 1Department of Economics, Gomal University D.I.Khan, KPK, PAKISTAN
  • 2 Department of Statistics, Islamia College University Peshawar, KPK, PAKISTAN
  • 3 COMSATS Institute of Information Technology, Malsi Road, Off Multan Road Vehari,, PAKISTAN

Res. J. Recent Sci., Volume 2, Issue (5), Pages 59-62, May,2 (2013)

Abstract

In this article, basic export demand determinants are reconsidered for Pakistan. There are empirical studies on Pakistan’s export demand, however, ignore to calculate for export weighted foreign income and relative export prices taking a large number of trading partners, which is important due to high involvement of the country with utmost trading partners for accurate elasticity estimate. To communicate the issue, we in this paper estimated the export model with two regressors, real effective exchange rate and real foreign income. The empirical finding depicts that there is co-integration among the variables but the export model is functionally weak having two conventional determinants for the year of 1981 to 2010. Instead, the analysis indicates an important role for the average foreign income and insignificant for real exchange rate.

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