Domestic Prices of Imports in Pakistan: Extension of Empirical Findings

Mati Lal Pal


The main purpose of this study is to supplement the empirical
findings of an earlier paper by the author on the domestic prices of
imports in Pakistan [8]. In order to determine the factors which
influence the prices of imports in Pakistan, some selected commodities
were studied in the earlier paper and it has been found that, due to the
presence of direct controls on supply, the im¬ porters could earn an
excess profit and the licensing system was the main deter¬ minant of the
domestic prices of imports at the margin. Changes in duty levels did not
have any effect on domestic prices up to a limit defined by the extent
of the excess profit" " Since the study cited was completed, there have
been some significant changes in the import policy of Pakistan.
"Liberalisation" of imports was broadened with the expansion of the
"free list". In Section I of this paper an attempt has been made to
determine the effects of free list imports on the supply and prices of
imports, and on the mark-ups of importers.

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