INTRODUCTION The project assigned to me is to calculate coefficient of elasticity by a small survey research by gathering data from field to check

the effect of income on demand of item.The topic of research is to gather information about the number of toys a child is having in different class of families.I gathered data about four young girls belonging to different families.I also gathered some of the demographic information about their name,age,gender,number of members in a family ,their total income ,type of toys.I collected data from the young girls of age between 5-10.I included four families Rich,upper middle class,lower middle class and a poor family.The domain of survey is Rawalpindi city.

Experience while collecting data As the topic assigned to me is very unusual when I went to the field to gather data firstly the response of people was not good they thought that I m joking with them and some of them gave funny replies,some were amazed and some were not willing to provide information about their income that they are not sure that their details would be used for only survey it can be a hidden aim behind it and the information can be used for wrong means but when I showed them the project requirements then they gave the data regarding the survey. Some of data I collected from my family but they were also hesitant about telling their income because people dont want others to know about their income.People also tried to give wrong information about the number of toys their childlongingren are having and the type of toys. Experience of data gathering from the field was very different because I have never done such type of survey research. As it also gave me an idea about the real life truths that how people are living their lives with such a low income levels which showed me the hardships of the life. And the children belonging to low income group have toys by name just and are in very bad condition or are having old toys given by rich or upper class.

On the other hand rich family children have high quality of toys and in a large number even they are not bothered about the number. They can get any type they want.

Talking to a retailer I went out in the saddar market to talk to retailer of toys,I told them about the survey and asked them few questions that Do they notice that their customer belong to different income? They said that it is very easy to identify that their customer belong to which income group their style,taste and prefrences depict their income level their appearance also matters a lot and it is very easy to know that what type of toys they would like and purchase but rarely there is a chance that the shopkeeper is unable to depict because some people are very simple although vey rich but their outer look does not show about the class they belong to.rich people are very confident about there talk and style. Does the buying behaviour of customer shows their income group? Yes the buying behaviour depicts the income level of the customer because there are different type of toys in a shop very expensive that are electronic,stuff toys and other are not so expensive and the choice of the toys shows about their income level.Yes there is a relationship between income and buying behaviour because the person with low income cannot afford to buy those high quality and expensive toys.

INCOME ELASTICITY OF DEMAND DEMOGRAPHIC INFORMATION OF SAMPLE RICH FAMILY Name Age areeba 8

Income 200,000 Family members 4 Number of toys 40 Upper middle class Name wajeeha Age 6 Income 95,000 Family members 5 Number of toys 30

Lower middle class Name emaan Age 5

Income 35,000 Family members 4 Number of toys 10 Poor faimly Name javeria Age 7 Income 10,000 Family members 7 Number of toys 2

CALCULATION OF PER CAPITA INCOME

RICH FAMILY

PCI = total income number of family member PCI= 200,000 4 PCI=50,000 Rs

UPPER MIDDLE PCI = total income number of family member PCI =95000 5 PCI =19,000Rs

LOWER MIDDLE CLASS FAMILY PCI = total income number of family member PCI =35000 4 PCI =8,750Rs

POOR FAMILY PCI = total income number of family member PCI =10,000 7 PCI =1,429Rs

COEFFICIENT OF ELASTICITY Formula=q/I I/Q Calculation of 1st coefficient

POOR FAMILY TO LOWER MIDDLE CLASS

POOR FAMILY=PCI0 LOWER MIDDLE CLASS=PCI1 I=( PCI0 +PCI1)2 I=(1429+8750)2 I=5089.5 or 5090 Quantity demanded of toys Q=(q0+q1)2 Q=(2+10) 2 Q=6 Change in income I= PCI0- PCI1
=1429-8750

=-7321 Q=q0-q1 =2-10 =-8 Putting values in formula =q/I I/Q =-8/-73215090/6 =0.00109848.33 =0.93 Calculation of 2nd coefficient
LOWER MIDDLE CLASS TO UPPER MIDDLE CLASS LOWER MIDDLE CLASS =PCI0 UPPER MIDDLE CLASS= PCI1

I=( PCI0 +PCI1)2 I=(8750+19000)2 I=13875 Rs

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Quantity demanded of toys Q=(q0+q1)2 Q=(10+30) 2 Q=20 Change in income I= PCI0- PCI1
=8750-19000

=-10250 Q=q0-q1 =10-30 =-20 Putting values in formula =q/I I/Q =-20/-1025013875/20 =1.3536

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 Calculation of 3rd coefficient Upper middle class to rich family Upper middle= PCI0 and q0 Rich family= PCI1 and q1 I=( PCI0 +PCI1)2 I=(19000+50000)2 I=34,500.Rs Quantity demanded of toys Q=(q0+q1)2 Q=(30+40) 2 Q=35 Change in income I= PCI0- PCI1
=19000-50000

=-31000

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Q=q0-q1 =30-40 =-10 Putting values in formula =q/I I/Q =-10/-3100034500/35 =0.00032985.714 =0.315 or 0.32 Calculation of 4th coefficient rich family to poor family Rich family = PCI0 and q0 Poor family= PCI1 and q1 I=( PCI0 +PCI1)2 I=(50000+1429)2 I=25714.5 or 25715.Rs

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Quantity demanded of toys Q=(q0+q1)2 Q=(40+2) 2 Q=21 Change in income and quantity I= PCI0- PCI1
=50000-1429

=-48571 Q=q0-q1 =40-2 =38 Putting values in formula =q/I I/Q =38/-4857125715/21 =0.0007821224.52

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=0.95 Coefficients 1st 2nd 3rd 4th Type of family Poor to lower Middle Lower middle to Upper middle Upper middle to Rich Rich to Poor elasticity 0.93 1.3536 0.32 0.95 Demand Inelastic elastic Inelastic inelastic

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CONCLUSION: As this survey provided me an insight to the income elasticity of demand and I understanded the concept in avey interesting manner and I was able to figure out the problems faced by the people with lower income group and the levish life style of high income family.In the end it was a good experience and knowledgeable work.

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