Lahore School of Economics

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Children in Punjab fall below international health standards

Eight per cent of Pakistani children die before they reach the age of five, giving Pakistan the highest child mortality rate in South Asia. Height and weight for age are also low which further increase the susceptilbility to disease. However, current surveys in Pakistan are lacking information on the leading causes of health status.


Collecting more precise evidence on the key determinents of poor health outcomes in Pakistan, particularly those that can be influenced by policy, is of utmost importance for policy makers for informing government action, reveals research by the Lahore School of Economics.

In order to address these issues, Lahore School researchers evaluated heights, weights and mortality rates of children in Pakistan and found that factors such as income, education, sanitation, water and access to primary care facilitiesare key determinants of child health. The researchers found that the average four year old Punjabi boy is 6.3 centimeters (2.48 inches) shorter than the international norm.

A closer look at the author’s results found that mother’s education is found to be a prime determinant of health status and found that the mother is considered to be the “first line of defense” against illness in her family, particularly among children. The results showed that mothers with some education reduce child mortality rate to 3.3% from a mean of 8% for mothers with no education, which is an enormous difference.

The research also found that the effect of the family’s wealth/financial status was very largein determining child health and appears to be getting stronger over time. This shows that an important role of the government would be to mitigate inequalities in income by forming a public policy that equalizes outcomes between social classes and flattens the relationship between income and health.

Interestingly, the presence of a public curative health facility was not found to be correlated with better health in this research. According to the results, 88% people who seek medical help go to private sector, while only 7% go to a public hospital, 2% go to primary facilities, and 16% do not seek any care for health problems. The findings also showed that firstly, wealthier families are more likely to do something rather than nothing when a child gets ill. Secondly, girls are less likely to be taken to private health facility as compared to boys.

On the whole, the research shows that the key measures of health status of children are critically affected by financial status of the family, education of mother, sanitation, water and access to primary care facilities. Thus the government needs to give high priority for policy interventions that addresses these issues.

The IGC funded study was conducted by CDPR and the researchers included Ms. Uzma Afzal, Research Fellow, Centre for Research in Economics & Business, Lahore School of Economics along with fellow researchers including Usman Ghaus (Teaching Fellow, LUMS) and Dr. Jeffrey S. Hammer (Woodrow Wilson School of International Affairs, Princeton University, USA).

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posted by S A J Shirazi @ 9/09/2016 02:41:00 PM,

Soccer ball production faces serious challenges over production cost, quality

Pakistan’s soccer ball production is facing serious challenges like increasing production cost and quality issue because of the soccer industry’s workers resistance to new technology, reveals a survey by Lahore School of Economics.


All of Pakistan’s soccer ball production is concentrated in Sialkot, which remains the major source for the world’s hand stitched soccer balls. In recent years the industry has faced increasing competition from East Asian countries, especially China, which has hurt exporters.

Researchers at the Lahore School of Economics studying the cluster of soccer-ball producing firms in Sialkot found that workers tend to resist new technology, even if it was given for free. This was despite the fact that the use of a new cutting technology (or “cutting die”) invented by the researchers could achieve more pentagons per sheet of rexine (artificial leather), thus reducing rexine cost per pentagon as compared to the traditional technology.

Adoption of this die could reduce the total cost by approximately 1 per cent and even though this number was smaller in absolute terms, given the low profit margin of around 8% in the industry, the net benefit from adopting this new technology was quite significant for the industry’s competiveness. Studying the reasons for lack of adoption, it was found that workers resisted the new technology because they were worried that their overall wages would fall since the key employees in this sector are typically paid piece rates, with no incentive to reduce waste, and the new technology slows them down.

To further investigate the reasons behind slow adoption, the researchers paid the factory workers Rs 15,000 to practice with the new technology. This modest change in the incentive payment was found to lead to adoption of the technology.

The researchers concluded that to bring technological innovation to life, both technology adoption and organizational changes should go hand in hand. The findings also suggested that the firms should be flexible in accommodating modified organizational structure and workable wage contracts. A mechanism where the employees are expected to share some gains from new adoption was also strongly recommended.

This project was funded by IGC and PEDL and the researchers included Dr Azam Chaudhry, Professor and Dean, Lahore School of Economics, Shamyla Chaudhry, Assistant Professor, Lahore School of Economics along with fellow researchers including David Atkins (Department of Economics, MIT), Amit K Khandewal (Graduate School of Business, Columbia University), and Eric Verhoogen (Department of Economics, Columbia University).

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posted by S A J Shirazi @ 9/09/2016 02:04:00 PM,

Study finds govt’s focus on exporters rightly placed

Developing countries have sought to promote exports as a growth strategy since they are both – a source of higher demand and of coveted foreign exchange. Proponents of trade liberalisation argue that there is a positive relationship between openness of economy and productivity of its firms.


A research conducted by the Lahore School of Economics suggests that this works through the introduction of imports that increases competition and lowers the average cost of production due to the exit of low-productivity firms.

Research showed that the average sales from exports were approximately 51% of total sales in Punjab and that many exporters in Pakistan don’t have a significant domestic presence. Exporting firms have been found to have 29% higher revenues and 150% more output even after controlling for firm level characteristics such as geographical locations and ownership status. The labour productivity of exporting firms was found to be two to three times higher than that of non-exporters and exporters were doing better in terms of larger firm sizes, more employment opportunities, higher compensation and greater productivity.

The researchers found that apparel producers are doing well and exporting nearly 93% of their output. This sector employs on average 400 workers per organisation and offers significantly higher compensation which makes the sector favourable for exports. Therefore, the government’s recent emphasis on developing the readymade garments sector is well placed.

The researchers also found generally that the capital to labour ratio among exporters was twice than that of non-exporters. Exploring some additional dimensions by which the exporting and non-exporting firms differ, it was found that the average exporting firms tended to use a larger share of imported material in their input mixes than non-exporting firms.

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posted by S A J Shirazi @ 9/09/2016 01:28:00 PM,

Sample of firms: Survey reveals guarded optimism

Pakistan’s years of suffering through a crippling economy seem to be coming to an end and all that is needed now are strong policies that benefit the country in the short as well as long run, stated a survey.

A recent business confidence survey conducted by the Lahore School of Economics and the Lahore Chamber of Commerce and Industry (LCCI) covered a variety of firms across three sectors – manufacturing, services and retail – and found that these companies had grown over the last year in terms of sales, investment, size and technology.

In general, the sample firms expressed optimism, anticipated higher growth, and have invested in innovation which points towards renewed economic growth in these sectors.

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posted by S A J Shirazi @ 9/08/2016 02:07:00 PM,

‘Industrial policy can help end crisis in manufacturing’

Manufacturing growth has played a vital role in the development of advanced economies as well as in most developing economies and has also helped in closing the income gap between the two. Presently, the manufacturing industry in Pakistan, which was seen as the engine of growth, is in crisis.

Growth in the large scale manufacturing (LSM) sector, which accounts for 80 percent of the manufacturing sector, has shrunk to its all-time lowest level of 1.1 percent per annum over the last seven years, with no signs of a pickup in the current period. One key reason is that over the last few decades, Pakistan’s exports have not been significantly upgraded in terms of technology or sophistication. As a result of this stagnation in product sophistication, researchers from the Lahore School of Economics have found that Pakistan is on the brink of, if not already in the midst of, premature deindustrialization that blocks off the main avenue for the country to catch up with advanced economies.

However, some positive recent developments like the improvement in the internal security conditions and the announcement of China-Pakistan Economic Corridor investment package of about US$ 46 billion could boost both domestic and foreign direct investment in the country. This raises the chance that Pakistan’s manufacturing growth might be revived to once again achieve the levels reached in the previous high growth cycles.

The researchers found that the main reason for the crises in the Pakistani manufacturing sector is that there has not been any pro-active industrial policy since the 1990s. Based on their analysis, the researchers suggest that there is an urgent need to develop and implement a comprehensive and pro-active industrial policy. This policy should consider the main constraints of the sector such as, curtailing unnecessary taxes on manufacturing, prioritizing manufacturing in the management of power and gas shortages, insulating the sector from the chronic exchange rate overvaluation, and finally helping the sector move up the sophistication curve by developing the required technical and skilled manpower. Only with a focused industrial policy can there be a revival in manufacturing growth in Pakistan.

This research was funded by the Lahore School of Economics and was published in the Lahore Journal of Economics. The researchers included Dr. Naved Hamid, Director, Centre for Research in Economics and Business, Lahore School of Economics and Ms. Maha Khan, Research and Teaching Fellow, Centre for Research in Economics and Business, Lahore School of Economics.

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posted by S A J Shirazi @ 9/08/2016 01:23:00 PM,

Readymade garment exports should be govt’s focus

Developing countries have sought to promote exports as a growth strategy since the area source of both higher demand and of coveted foreign exchange. Proponents of trade liberalization argue that there is a positive relationship between openness of economy and productivity of its firms.


However, the mechanism through which this works is by the introduction of imports which reduce the markups that the firms charge from consumers due to greater competition which in turn lowers the average cost of production due to the exit of low-productivity firms. In Pakistan, exporting firms use more imported inputs, are more productive and capital intensive and have higher growth potential reveals recent research conducted by the Lahore School of Economics.

Researchers from the Lahore School of Economics showed that the average sales from exports, among exporters, was approximately 51% of total sales in Punjab and that many exporters in Pakistan don’t have a significant domestic presence.

Exporting firms have been found to have 29% higher revenues and 150% more output even after controlling for firm level characteristics such as geographical locations and ownership status. The labor productivity of exporting firms was found to be 2-3 times higher than that of non-exporters and exporters were doing better in terms of larger firm sizes, more employment opportunities, higher compensation and greater productivity.

The researchers from the Lahore School of Economics found that apparel producers are doing well and exporting nearly 93% of their output. This sector employs on average 400 workers per organization and offers significantly higher compensation which makes the sector favorable for exports. Therefore, the government’s recent emphasis on developing the readymade garments sector is well placed.

The researchers also found generallythat the capital-labor ratio among exporters was twice than that of non-exporters. Exploring some additional dimensions by which the exporting and non-exporting firms differ, it was found that the average exporting firms tended to use a larger share of imported material in their input mixes than non-export  ing firms. Also, looking at the number of days a factory is in operation, it was found that exporters’ factories operates, on average, more days than the non-exporting factories.

This research was conducted by Dr. Theresa Chaudhry, Associate Professor, Lahore School of Economics and Muhammad Haseeb, University of Warwick.

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posted by S A J Shirazi @ 9/03/2016 02:59:00 PM,

Lahore Journal of Economics

The latest issue of the top ranked Lahore Journal of Economics (Volume 21-1, January-June, 2016) is now available online.

This issue covers a wide range of topics:

You can access it here

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posted by S A J Shirazi @ 7/01/2016 04:54:00 PM,

The Lahore School of Economics Quality Enhancement Cell

Members of Quality Enhancement Cell of the Lahore School of Economics:
  1. Dr. Azam Chaudhry, Professor and Dean, Department of Economics and Head QEC
  2. Ms. Amberin Tanveer, Director, QEC
  3. Ms. Mamoona Nazeer, Deputy Director, QEC
  4. Ms. Sehrish Khan, Assistant Director, QEC
  5. Ms. Rabia Rauf, Assistant Director, QEC
  6. Ms. Neha Javaid, Assistant Director, QEC
Membership of International Bodies:
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posted by S A J Shirazi @ 6/08/2016 09:45:00 AM,

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Lahore, Pakistan.

Phones: 92-4236560935, 36560939


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