Econometric Analysis of Price Shock and Consumption Demand of Sugar in Pakistan

The main objective this research study to estimate the price elasticity, price shock and consumption demand of sugar in Pakistan. Time series data from 1990-2013 were taken from various secondary sources, the data series is stationary if its mean (Exi) and variance (Xt) are constant over the time of the covariance. The small way to estimates testing of order integration is to performed the Augmented Dickey Fuller (ADF) tests for unit root Data were analyzed by using E-Views7. The regression Model was used Consumption of Sugar as a dependent variables includes price and shocks. Explanatory variable price changes and shocks and price substitute. It was revealed that Political involvement and government irregularities were responsible for the huge price shocks. It was further revealed that sugar industry prices were not stable always-increasing trend. Sugar industry has monopoly in Pakistan.