Abstract
The study aims to investigate the long run and short run impact of raise in food prices on poverty level in Pakistan. For this sake, Study uses time series data ranging from the years 1973 to 2013. The time series properties of the data show the mixed order of integration. So, study used ARDL technique and error correction model for the estimation of the results and it is a preeminent methodology to use as compared to other methodologies. Result shows that rise in prices are responsible for enhancing the poverty level in Pakistan. Therefore, effective policy for eradication of poverty bothers much more about the rise in prices. Increase in the food prices enhance firm’s incentives but reduce the purchasing power of the consumer which stimulates poverty both in the short and long run, the results reveal.