Cointegration and Error-Correction Modelling of Wheat Consumption in Pakistan

This paper provides an empirical analysis of wheat consumption inPakistan for the period 1975 to 2006 using cointegration analysis anderror correction model. The estimated long and short-run elasticitiessuggest that income is the most significant determinant of wheatconsumption in the long run while price of wheat is the major affectingfactor of wheat consumption only in the short run. The less elastic natureof wheat demand both in the short and the long run suggests that underthe likely Doha Round agricultural trade liberalization, wheat price risewill harm the poor consumers.