Abstract

Pakistani wheat growers and their economic implications are analyzed through alternative specifications of the Demand Model. Existences, nature of production lags, and the choice between expected wheat and gross returns were taken as the preferred explanatory variables of producers’ response to the changing economic condition. The analyses indicate that there are lags which are, primarily, due to the difficulties and cost of rapid adjustment rather than to the time required to revise expectations. The statistical results were similar for the alternative specification of gross margins and wheat as the economic decision available. However, the wheat elasticity derived using the gross margins specification were about a third of those using the wheat specification.

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