Statistical Estimation of the Demand for Jute Goods in Pakistan

The purpose of this study is to derive a demand function for jute goods in Pakistan. Such an exercise is necessary for several reasons; to provide a systematic analysis of the forces that govern the demand for jute goods in Pakistan and to make it possible to provide (assuming no serious structural changes within the economy) a reasonably probable basis for planning future production targets in jute goods, since internal demand together with export demand would determine such a target. At this date it is difficult to discern any significant time-trend for jute demand; there have been large year-to-year fluctuations. To indicate the nature of such fluctuations: the figure for internal demand in 1960-61 was 16.87 per cent lower than that of 1956-57 while the figure for 1961-62 was 0.11 per cent lower than the level of 1956-57 and 20.16 per cent above the level of 1960-61 (see, Appendix Table A-l). However, since demand for jute goods is a derived demand, such fluctuations could not have been primarily random, nor could they have been due to any odd factor such as the enigma of taste changes. Such fluctuations can then be sought to be traced to the fluctuations in the levels of its determinants and the purpose here, essentially, is to find whether these demand fluctuations can be systematically explained as being caused by changes in some of these determining variables.