Energy Crisis and Productive Inefficiency: Micro-Evidence from Textile Sector of Faisalabad

This study measures productive inefficiency in the textile sector of Faisalabad due to recent energy crisis in Pakistan. Primary data is collected randomly from 125 firms of the industry. Results explain that these firms are facing huge production loss which varies from 23 to 65 percent in 8-hour shift and 21 to 60 percent in 10-hour shift. Spinning and textile firms are facing severe electricity outage while dyeing, chemical and processing firms have huge production losses due to gas shortage. The study further explains that 64 percent of the firms are willing to pay for uninterrupted energy supply and their willingness to pay varies on average in the range of PAK Rs 5 to 9 per unit of electricity.