Nexus Between Consumer Welfare and Marshalian’s Demand Function; Evidence From Pakistan

Abstract

Consumer welfare and their satisfaction is the primary and basic objective of any government, policy makers and economists. The theory of economics encircles from welfares of the consumers. In this regard, the demand function has persuasive role in determining the welfare through purchasing power. That’s why, the consumer welfare is measured from Marshallian’s demand through Indirect Utility Function during 1980-2017 for Pakistan. The variables are stationary at level and in analytical technique, the NLS and ARMA (Least Regression Analysis) method was operative through econometric views (E-Views) software. The result indicates that income of the consumer has significant and positive effect, while price of goods has significantly negative effect on the consumer welfare and utility in case of Pakistan. Further, the long run association of consumption, income and consumer welfare was found. This study recommends that incremental efforts are required by the government to bring stability in the prices of goods, policies must aim and focus on provision of employment and income generating activities, control of income inequality and minimize income class disparities to maximization welfare of the individuals living in different regions and in societies of Pakistan.

Remittance and Macroeconomic Performance in Top Migrating Countries

“…This could serve as a way to buttress Ebaidalla and Edriess (2015), who found that the macroeconomic environment plays an important role in facilitating remittance inflow into an economy. Further justification is that remittances have been found to be inflationary since they fuel higher consumer spending (Iqbal et al 2013;Rivera and Tullao 2020). However, there is no cause for alarm on the potential endogeneity bias that could ensue as a result of combining remittance and inflation as multiple regressors, given that the two techniques of analysis employed provide for this eventuality.…”

Relationship between Remittances and Inflation in Nepal

“…For example, Nisar and Tufail (2013) examined the remittance-inflation nexus in Pakistan and found that remittances, money supply, and real per capita GDP have a positive impact on inflation in Pakistan. On a similar note, the study by Iqbal et al (2013) also concluded that remittances have fueled inflation in Pakistan. A study by Roy and Rahman (2014), using a vector error correction model, found that remittance has put inflationary pressure on Bangladesh, especially food inflation.…”