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The present study focuses on a widely discussed phenomenon, Asymmetric Price Transmission, which refers to the nonlinear behavior of prices when they are evaluated at their crests and troughs. The underlying study attempts to capture this behavior, giving special emphasis to the transportation sector of Pakistan. By employing monthly data of retail oil prices spanning between 1990 and 2016, we have tried to empirically investigate the existence of this phenomenon in a sector directly linked with oil price variations. This sector has been often overlooked in terms of its evaluation within the given context. Our study employs a recently developed nonlinear autoregressive distributed lag model (NARDL), to examine the pass‐through of oil prices into the fares of the transportation sector. This model allows us to capture short‐run and long‐run estimates simultaneously and also offers an opportunity to determine the magnitude of respective positive and negative oil price shocks. In addition, this study categorizes the transport sector into subsegments of LTVs and HTVs and finds differential patterns in the response of these two categories against oil price variations. The obtained results indicate that oil prices affect the fares of the transportation sector asymmetrically. The findings of the study are instrumental for identifying the pass‐through of oil prices to the subsegments of transport sectors. This identification about the differential impact/pass upon the various segments of the transport sector can be helpful for policymakers, especially if they are concerned about devising a trickle‐down policy in periods of oil price decline.

Oil prices not only affect the agricultural commodity directly but also indirectly through different channels. However, among these channels, the most important is the channel of exchange rate. The reason for putting emphasis on the mediating role of exchange rate between the oil prices and food prices nexus is that the oil‐importing counties like Pakistan pay their import bills in terms of foreign currency in the international market which as a result escalates the demand for foreign currency in oil‐importing countries. This study has analyzed the indirect influence of oil prices on food prices via exchange rate. We developed a Composite Index (CI) of the agricultural commodity prices including wheat, cotton, rice, gram, sugar cane, and maize. This index is generated by using Principal Component Analysis (PCA). Further, to construct our econometric model, we used mediation approach by applying Seemingly Unrelated Regression (SUR) model. The results indicate a positive relationship between exchange rate and prices of oil. We also found the same relationship between exchange rate and the food prices. In addition to this, we witnessed positive effects of prices of oil on the food prices in the presence of exchange rate. Our study confirms that exchange rate partially mediates between the nexus of oil prices and food prices. Our analysis explains the impact of oil price on agricultural commodity prices through the channel of exchange rate by using time series data of Pakistan.

AbstractThis study develops and validates a comprehensive mechanism for evaluating the effect of zakat (obligatory alms‐giving) on reducing poverty and attaining some of the prominent Sustainable Development Goals. The study unconventionally analyzes the effect of macrolevel data on microlevel data on district level of Khyber Pakhtunkhwa, Pakistan. Microlevel data are utilized from a renowned national survey, Pakistan Social and Living Standards Measurement Survey (PSLM) from which the Multidimensional Poverty Index (MPI) has been computed, whereas the macrolevel data have been collected from Zakat & Usher Department Khyber Pakhtunkhwa. Based on the nature of nested data set, we have used a multilevel model to counter intra‐class correlation. The findings confirmed and validated that the novel aspect of the zakat negatively affects the multidimensional poverty and portray significant contribution in targeting several Sustainable Development Goals (SDGs) in Pakistan. Based on the empirical evidence, Zakat being as an obligatory arm which equips individuals to fulfill their necessities, this paper suggests necessary strategies toward zakat disbursement. The mechanism should be refined to stimulate economic growth and pursue SDGs via financial empowerment of less advantaged class of society by reducing poverty in developing countries like Pakistan. Moreover, the methodology adopted in the study opens doors for more enabling and conducive research practices in order to decompose the results and design policies accordingly.