Poverty and Its Determinants in Pakistan: Evidence from Pslm 2010-11

Abstract

This study estimates the poverty in terms of head count ratio, poverty gap and squared poverty gap by using the fresh available PSLM data for the year 2010-11 in Pakistan. This study also finds its economic determinants by estimating multiple OLS regression.The results show that the headcount ratio, poverty gap and squared poverty gap are statistically significant 15.06 %, 2.29 % and 0.55 %, respectively in Pakistan. All of the poverty estimates arestatistically significant almost double in rural areas as compared to urban areas. The comparisons of the poverty estimates of this year with the previous ones of2007-08 at urban, rural and nationallevel show that poverty decreased statistically significantly. Among the provinces it is the highest in Baluchistan and the lowest in Sindh. The comparison of provincial poverty estimates of this year with the same ones of previous year (2007-08) depict that poverty decreased in all of the provinces, but it is statistically significant only in case of Baluchistan.Further the resultsshow that Poverty has statistically significantinverse relationship with education. Households having animals for transportation, owning residential buildings, shops and commercial buildings and living in urban areas have less poverty than those who do not. But it hasstatistically significant positive association with the household size and dependency ratio. The household size is greater in poor families than the rich ones. As far as household head’s employment status, occupation and industry is concerned, it is highest in sharecroppers,elementary occupations, and community, social services. At a policy level, it is suggested that Govt. should focus more on education and generationof employment opportunities. Further it should provide loansto lower income groups on reduced rates for housing facilities andto start their own businesses like shops.Family planning should be encouraged especially in poor families.All such policies should focus more on rural areas of especially Baluchistan and KPK in Pakistan.

Keywords: Poverty; Education; Animal for transportation; Household size;  Dependency ratio; Family planning; Residential building;Shops; Pakistan.