Reliability of Pakistani Agricultural Price Data

Prices have important allocational and distributional implications in a market economy. This is equally true for the prices of agricultural commodities in developing countries. In their decision to allocate land among different crops, farmers in developing countries have been found to be quite sensitive to changes in relative prices [1]. Also relative prices between the agricultural and non-agricultural sectors are considered to be important determining factors in the sectoral distribution of income and the development of the modern sector [2]. In Pakistan, a number of empirical studies have been carried out to explain the pattern of growth in the agricultural and non-agricultural sectors with the help of changes in relative price movements among different agricultural crops, or among manufactured consumption and capital goods, or between agricultural and manufactured goods [3,4,5,6]. The validity of the results derived from these studies would depend greatly on the reliability of the basic price data. Thus it is important that an attempt be made to judge the reliability of the agricultural price data.