Advances in Economics and Business Vol. 3(12), pp. 571 - 576
DOI: 10.13189/aeb.2015.031205
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The Determinants of Food Price Inflation in Pakistan: An Econometric Analysis

Faheem Ur Rehman ¹, Dilawar Khan ^2,*
1 Department of Economics, Abasyn University Peshawar, Pakistan
² Department of Economics, Kohat University of Science & Technology, Pakistan

ABSTRACT

This study seeks to identify the factors affecting food price inflation in Pakistan during 1990–2013. The study applied various econometric tests i.e. Augmented Dickey Fuller, Vector Error Correction model and Johansen co-integration test. The econometric results show that indirect taxes and food exports have positive and significant impact on food price inflation while government subsidy and GDP are negatively correlated with food price inflation in Pakistan. The Johansen co-integration test also shows long-run relation of indirect taxes, food export and subsidy with food price inflation. It is recommended that government should give attention to the agricultural sector and also reduce the taxes on food items.

KEYWORDS
Taxes, GDP, Subsidy, Inflation, Pakistan

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Faheem Ur Rehman , Dilawar Khan , "The Determinants of Food Price Inflation in Pakistan: An Econometric Analysis," Advances in Economics and Business, Vol. 3, No. 12, pp. 571 - 576, 2015. DOI: 10.13189/aeb.2015.031205.

(b). APA Format:
Faheem Ur Rehman , Dilawar Khan (2015). The Determinants of Food Price Inflation in Pakistan: An Econometric Analysis. Advances in Economics and Business, 3(12), 571 - 576. DOI: 10.13189/aeb.2015.031205.