Papers for Forthcoming Issues
1- Estimating ‘Growth Elasticity of Poverty’ for Asian Economies
by Naeem Akram, Muhammad Irfan Akram
Over the years, poverty reduction has been recognised as the main objective of development policy. To reduce poverty, economic growth is very crucial. The responsiveness of growth towards poverty reduction is measured by ‘growth elasticity of poverty’. The present study attempts to calculate growth elasticities of poverty in nine selected Asian countries, for the period 1986-2015 by using three different methodologies. Study finds that calculated elasticities have considerable variations by using different methodologies. It is suggested that the calculation of elasticity by using formula is most appropriate because it directly calculates the elasticity by using the data of poverty rate and per capita GDP. Study finds that considering the poverty line of USD 1.90 a day as well as USD 3.20 a day; China is having the highest growth elasticity of poverty. It was also been found that responsiveness of growth to poverty reduction has increased during the period of 2001-2015 in comparison to period of 1986-2000.
2- Analysis of Agricultural Production in Pakistan: A Study Based on Asymmetric Role of Inputs
by Naveed Iqbal, Maqbool H. Sial and Adeel Saleem
Agricultural inputs are peculiar in nature as an asymmetry in their roles can be identified during the production process. These inputs can be grouped in to a set of growth inputs or a set of facilitating inputs. The inputs affecting biological or physiological growth from the inside of the plant are called growth inputs e.g., water, nutrients, seed, and soil. The inputs that affect plant growth indirectly, such that they regulate the role played by growth inputs from outer environments of plants e.g., pesticides, capital, and labor are facilitating inputs. This concept of asymmetry, based upon agronomic principals of crop production, is incorporated in agricultural economics by Zhengfei, Oude Lansink, van Ittersum, and Wossink (2006). This variant role of inputs is studied by using farm household level data. In Pakistan, this study is one of the first studies that employ a double bootstrap methodology for two-stage analysis in a semi parametric way. It is reported that pesticides, family labor, and pesticides enhance Technical Efficiency (TE) of growth inputs. However, hired labor affects it negatively. The study also shows the effect of farm size on productivity.
3- Media and Policy: An Application of Cox Proportional Hazard Model to Evaluate Population Policy of Pakistan
by Muhammad Kashif, Alvina Sabah Idrees And Raees Aslam
In developing countries like Pakistan, family planning program has been the principal instrument of a population policy to influence fertility behavior and preferences. For effective implementation of such programmes, media plays a crucial role to bring awareness among people. Through information sharing, media helps in restructuring the society’s preferences to bring them in line with the set policy targets. This study undertakes the analysis in retrospect by evaluating the Population Policy of Pakistan 2002.The increased use of family planning methods was incentivized through media coverage. Cox proportional hazard model is applied to explore the extent to which the policy remained effective in influencing the fertility behavior by an increase in contraceptive use through mass media campaign. The childbearing dynamics of women is analyzed using data from Pakistan Demographic and Health Survey (PDHS) 2012-13. The women’s age group included in the analysis is between 15 to 32 years. The data is segregated into 3-year calendar periods, divided into six groups, ranging over the time period from 1995 to 2012. The indicator of media coverage has been used to capture policy intervention while controlling for women’s education, wealth quintile index, and rural urban divide. Results show that policy of 2002was effective in increasing the birth gaps only for higher order of childbirth and mass media played an important role to bring awareness about contraceptive usage.
4- Access to Financing and Firm Growth: Does Firm Size Matter? An Evidence from Non-financial Firms of Pakistan
by Shafaq Munir, Abdul Rashid and Sohaib Ameer
Firms in Pakistan are likely to experience financial constraints due to money market imperfections that impede their growth. Yet, it is expected that these obstacles considerably vary with firm size. This paper is an empirical examination of the aforementioned issues and sets out to carry out empirical analysis. , It inspects a panel of 286 firms listed at the Pakistan Stock Exchange over the period 2005-2015 by applying fixed effect technique and the Arellano and Bond (1991) differenced-GMM estimator. The results suggest that small firms lean more on internal funds as compared to medium and large firms. The results also indicate that internal finance has significant, positive impacts on growth. Yet, as the financial constraints are relieved, medium and large firms prefer financing their projects by external funds and reduce the dependence on internal funds. However, small firms accumulate more internal funds even after mitigation of financial constraints because of their expensive borrowing and more associated risks.
5- Seasonal Migration in Tharparkar district of Sindh province, Pakistan: An In-depth Empirical Analysis
by Musharaf A. Talpur and Shameem Akhtar Mari
This paper thoroughly investigates the influence of poverty-related characteristics of poor households, such as socio-economic, livelihood and distance characteristics, on their decision to seasonally migrate from Tharparkar district of Sindh province to other nearby districts where seasonal livelihood and employment opportunities for them exist in the irrigated agriculture. The study was carried out using multi-stage cluster sampling and data was collected through face-to-face interviews using a questionnaire. We estimated a binary logit model and subsequently tested hypotheses about the influence of those poverty-related characteristics on poor households’ seasonal migration. Our hypotheses testing results exhibit that poverty among the households, existing in terms of their low household income, indebtedness, child labour, lack of access to drinking water and health services, is the major factor behind seasonal migration. To encounter the adverse effect of poverty on seasonal migration, we suggested several policy measures overall related to food security, water availability and economic opportunities, such as access to interest-free credit, livestock marketing, and promotion of handicrafts.
6- An Exploratory Study on Determinants of Government Investment In Pakistan
by Ahsan Abbas, Ghulam Mustifa and Eatzaz Ahmed
The study attempts to explore the determinants of government investment (public investment including general government investment) in Pakistan using autoregressive distributed lags (ARDL) estimation technique over the period 1964 to 2015. Both theoretical and empirical content available in the literature is employed to develop an econometric model to analyze the government investment behavior in case of a developing economy like Pakistan. The findings of empirical estimation indicate that budget deficit, output growth and foreign capital inflow boost government investment while domestic borrowing, military regimes and inflation discourage government/public sector’s investment activity.
7- Political Regime, Shadow Economy and Income Inequality: Evidence from Pakistan
by Tahir Mukhtar, Faiz Bilquees and Tahmina Yasmin
For the last three decades there has been growing literature focusing on empirical evaluation of the key determinants of income distribution across the countries. The present study aims to assess the impact of political regime and shadow economy on income inequalities in Pakistan over the period 1975 to 2016. Two estimation techniques, namely, fully modified ordinary least squares (FMOLS) and autoregressive distributive lag (ARDL) model have been used for estimation purposes. The findings indicate that democratic regime and shadow economy significantly contribute to the worsening of income inequalities in the country. Furthermore, the results also reveal that democracy reinforces income inequalities promoting impact of shadow economy in Pakistan.
8- Empirical Testing of Permanent Income Hypothesis for Pakistan and U.S Economies
by Fahad Malik and Muhammad Mazhar Iqbal
Permanent income hypothesis (PIH) has been empirically tested widely. However, the results are mixed so far. The probable reason for mixed results is different methodologies that make different underlying assumptions. The underlying assumptions are often contrary to the spirit of PIH. Moreover, some authors have tested it for a developed country or a set of developed countries while others have tested it for a developing country or a set of developing countries. Therefore, this study applies both methods and uses the data of a developed country such as USA and of a developing country such as Pakistan. The results show that PIH provides a good approximation of consumption decisions in both economies.
9- Do Macroeconomic Volatilities Affect Stock Price Volatility in Pakistan? An Empirical Assessment using Firm-Level Data
by Abdul Rashid, Rashid Rauf and Muhammad Imran
This paper empirically explores the influence of macroeconomic volatilities, namely oil-price volatility, real effective exchange rate volatility and manufacturing output volatility, on stock-price volatility by using annual firm-level unbalanced panel data over the period 1988-2017.The empirical results indicate that the impact of macroeconomic volatilities on stock-price volatility is positive. We report that both firm age and cash holdings have significant, positive impacts on stock-price volatility. In addition, we construct an index based on the macroeconomic volatilities using principal component analysis. The macroeconomic volatility index also assets the positive effect on stock-price volatility. Finally, the results reveal that the impact of macroeconomic volatility on stock price volatility is positive effect in both pre- and post-2007 Global financial crisis period. However, the influence is stronger during pre-crisis period.
10- Measuring Rural Income Inequality and Analyzing Agricultural and Non-Agricultural Incomes in Districts at China Pakistan Economic Corridor – CPEC in Pakistan Using Geographic Information System
by Lubna Naz
This paper has twofold objectives. First, analyze the rural income inequality, and its decomposition by employment status and education of the household.. Second, analyze the income inequality of districts lying at the China-Pakistan Economic Corridor. It used the Theil Index, a member of the generalized entropy inequality, and inequality decomposition technique. Furthermore, the Geographic Information System-GIS was used for mapping the rural income (agricultural and non-agricultural). Pakistan Social and Living Standards Measurement Survey (2012-13), provincial and district representative data set, was used. Results show that the households which mainly earned from agriculture, and those in which heads had the post-secondary qualification make the largest contributions to rural income inequality. A decomposition of income inequality within and between districts on CPEC routes indicates higher variations within the districts. GIS-based mapping of rural income depicts districts on routes of CPEC having large non-agricultural income.