Consumption Pattern and Living Standard of Farmers in the Province of Khyber Pakhtunkhwa

Abstract

The consumption pattern and standard of living are affected by economic efficiency of
farms. The economic efficiency is influenced by the agrarian structure of the province.
This study focuses on consumption pattern and standard of living of farmers in the
province of Khyber Pakhtunkhwa. The main objective of the research study is to identify
the consumption level and living standard of farms in the province. For the achievement
of this objective, four districts from different four ecological zones of the province were
selected on random basis. A sample size of 150 farmers was distributed among the ten
sample villages chosen from the selected districts. The regression models/consumption
functions have been estimated for the sample households.
The linear consumption function estimated for all the sample farmers has revealed that
the autonomous consumption is estimated at Rs.1074 per month, while the marginal
propensity to consume (MPC) at 0.70, implying that, on average the farmers consumed
70% of their increased income and the rest is saved. This finding is in conformity with
most of the developing countries. The high values of intercepts and MPC are attributed
to the large family size at the margin of break even point level of income. Thus the4
standards of living in terms of consumption is substandard. The 30% savings are the
compulsory savings like payments of debts. etc.