Consumption Pattern of Different Commodities in Pakistan

The aim of this research is to analyze the “Consumption Pattern of Different Commodities in Pakistan” using the cross-sectional data taken from the household integrated Economic survey. This paper aims to analyze that what is the impact of per capita consumption on different household income group in Pakistan. In particular, per capita consumption of eleven (11) different variables with respect to different income groups. Ordinary least square method was used for the estimation of each equation for each variable. in the purpose of estimating this, different income groups were taken and identified the exact relationship between average incomes per household to the average expenditures per household since in the estimation of equations per capita consumption of each income group calculated respect to per capita income, so the formation of different equations were determined. Per capita income (PCY) becomes independent of the unit of observation. Since, each household faces the same commodity prices prevailing at the time of household survey, for the purpose of analysis, total consumption expenditure has been disaggregated in to 11 commodity groups listed in table. The table indicates that value of R- squared is high and the co-efficient have correct signs and are significant at 1 percent level of significance, at 5 percent level of significance and at 10 percent level of significance. Overall results explain that with the increase in income expenditure increase for luxuries and decrease for necessities, but it will differ in rich and poor. Finally it is found that poor people consume more on necessities and rich people consume on luxuries as their income increase.