Does the Quantity and Quality of Cereal Respond to Changes in Income? Evidence from Pakistan

This study used log-log-inverse specification of Engel curve for cereals’ quantity and quality response to households’ income in Pakistan. The elasticities of interest (quantity, expenditure and quality) were inelastic with reasonable difference in magnitude across urban and rural households. Overall, the quality elasticity turned out to be positive with an estimated value of 0.0061 and 0.2375 for wheat wheat flour and rice rice flour, respectively. The estimation of quality elasticity based upon income quintiles revealed that the magnitude of quality elasticity increases for rice rice flour (0.2019 to 0.2639) while decreases for wheat wheat flour (0.0160 to -0.0012) as household move from poorest to richest quintile indicating an increased responsiveness of the high-income households to rice quality compared to wheat.