Import elasticity of tea: a case of Pakistan

Khan, Rana Ejaz Ali and Hussain, Tanveer (2011): Import elasticity of tea: a case of Pakistan. Published in: Interdisciplinary Journal of Contemporary Research In Business , Vol. 2, No. 11 : pp. 141-146.

Abstract

Pakistan is second largest importer of tea. It is based on the fact that negligible part of the consumption of tea is produced domestically. The import analysis of tea is significant to check the import bill. The paper empirically investigated the determinants of import of tea using annual time series data for the years 1977-2009 at the national level. We find that import of tea is positively influenced by GDP, domestic tea consumption and human population. While the domestic price of the tea and import duty on tea negatively impacts the import of tea. The findings indicate that import of tea cannot be significantly controlled by adjusting the variables of domestic price and import duty on tea. The point to the need for the policy makers is to decrease the import bill by changing the consumption behavior of the people and introducing the substitutes of tea which are domestically available.

• Item Type: MPRA Paper
• Language: English
• Keywords: Imports, Pakistan, Tea, International Trade
• Subjects: P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P33 - International Trade, Finance, Investment, Relations, and Aid; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q17 - Agriculture in International Trade; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L66 - Food ; Beverages ; Cosmetics ; Tobacco ; Wine and Spirits; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q18 - Agricultural Policy ; Food Policy

References

Arize, A. C. (2004) Foreign Exchange Reserves and Import Demand in a Developing Economy:The Case of Pakistan. International Economic Journal, 18,2:259-274.

Bergtold, J., E. Akobundu & Peterson E. B. (2004) The FAST Method: Estimating Unconditional Demand Elasticities for Processed Foods in the Presence of Fixed Effects.

Journal of Agriculture and Resource Economics, 29,2:276-295. CCP (2008) Demand Analysis for Tea in China. 18th Session Report of Committee on Commodity Problems (CCP). Hangzhou, China, 14-16May 2008.

Fabiosa, J. F. and Ukhova Y. S. (2000) New Aggregate and Source-specific Pork Import Demand Elasticity for Japan: Implications to U.S. Exports. Working Paper No. 00-wp 253. Center for Agriculture and Rural Development. Iowa State University.

Nagano, J., Suminori. K., Rreston L. & Mabuchi K. (2008) A Perspective Study of Green Tea Consumption and Cancer Incidence, Hiroshima and Nagasaki (Japan). Cancer, Causes and Controls, 12,6:501-508.

Nelson, J. A. (1991) Quality Variation and Quantity Aggregation in Consumer Demand for Food. American Journal of Agricultural Economics. 73,4: 1204-1212.

Sarmad, K. (1989) The Determinants of Import Demand in Pakistan. World Development,17,10:1619-1625.

Schmitz, T. G. & Seale Jr., J. L. (2002) Import Demand for Disaggregated Fresh Fruits in Japan.

Journal of Agricultural and Applied Economics, 34,3:585-602. Sinha, D. (1997) An Aggregate Import Demand Function for Pakistan. Atlantic Economic Journal, 25,1:114.

Tinbergen, J. (1946) Some Measurements of Elasticities of Substitution. The Review of Economic Statistics, 28,3:109-116.

Yuliando, H. and Akira N. (2006) Supply Management Options for Tea Producing Countries: A Case Study of Indonesia Tea Product and Its Competitors. Journal of Applied Sciences, 6,7:3170-3173.