In this study, we investigate the impact of indoor air pollution associated with cooking with solid fuels on children’s respiratory health in Pakistan. This study uses cross-sectional data from Pakistan Demographic and Health Survey (PDHS) 2012-13. The sample in this survey is representative at the national and provincial levels, including urban-rural breakdowns, as well as for Gilgit Baltistan and ICT Islamabad. This study focuses on the child population under five years of age. The sample size consists of 1 1,040 children under five years of age. This paper applies a health production model of parental decision making to examine how household resource allocation affects children‘s health. We estimate dose response function to estimate the effect of averting activities and the choice of fuel type on children's respiratory health. Type of fuel and averting activities are checked for endogeneity as they are choice variables. In estimating the model, we control for other factors such as child characteristics, mother characteristics, household characteristics and the unobserved factors across different Primary Sampling Units (PSUs). The results show that children in households using high polluting fuels are 1.47 times more likely to have Acute Respiratory Infection (ARI) than children in households using low polluting fuels. We also find that females are more exposed to the risk of ARI than males. The results suggest that availability of cleaner fuels can reduce the risk associated with ARI prevalence in Pakistan