An Intra-Provincial Analysis of Expenditure Elasticities and Household Economies of Scale

Abstract

This study revolves around the analysis of expenditure elasticities and the
household economies of scale in order to explore intra-provincial consumption patterns of Pakistan. The analysis is carried out for various food items using Household Integrated Economic Survey, which are usually consumed by the households. The included food stuffs are appeared as necessities of life. The commodities appeared to be more responsive towards any given change in income in rural areas as compared to urban areas. This fact is obvious because of the lesser purchasing power of the inhabitants of rural regions as compared to urban regions. On the other end, the consumers are having economies of scale towards the household size. This reveals the fact that bigger households or households with multiple members are able to achieve the same standard of living at lower per capita expenditures on goods than smaller households.