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    Poverty paper Poverty paper Document Transcript

    • A PROFILE OF POVERTY IN PAKISTAN IFTIKHAR AHMED CHEEMA SENIOR POVERTY SPECIALIST NOVEMBER 2005 CENTRE FOR RESEARCH ON POVERTY REDUCTIONAND INCOME DISTRIBUTION PLANNING COMMISSION ISLAMABAD Phone: 9202868, Fax: 9210254 www.crprid.org
    • Table of ContentsTable of contents............................................................................................................................. iiList of tables................................................................................................................................... ivList of figures.................................................................................................................................. vExecutive summary....................................................................................................................... vii1. Introduction .............................................................................................................................. 12. Data .......................................................................................................................................... 13. Methodology ............................................................................................................................ 2 3.1 Choice of welfare indicator ............................................................................................... 2 3.2 Consumption aggregate ..................................................................................................... 2 3.3 Adjustment of consumption............................................................................................... 2 3.4 Price adjustment ................................................................................................................ 3 3.5 Poverty line........................................................................................................................ 3 3.6 Choice of aggegator........................................................................................................... 44. Poverty comparison.................................................................................................................. 4 4.1 Spatial poverty comparisom .............................................................................................. 4 4.2 Poverty comparison by household characteristics........................................................... 15 4.2.1 Poverty by household size ............................................................................................... 15 4.2.2 Poverty by dependency ratio ........................................................................................... 17 4.2.3 Poverty by access to amenities ........................................................................................ 17 4.2.4 Poverty by access to land................................................................................................. 17 4.3 Poverty by household head characteristics...................................................................... 18 4.3.1 Poverty by educational attainment of head...................................................................... 18 ii
    • 4.3.2 Poverty by literacy of household head ............................................................................ 20 4.3.3 Poverty by sex of household head ................................................................................... 20 4.3.4 Poverty by status of employment of hhold head ............................................................. 215. Characteristics of the poor...................................................................................................... 22 5.1 Household size and dependency ratio ............................................................................ 23 5.2 Ever attended school........................................................................................................ 24 5.3 Gross and net enrolment rates ......................................................................................... 26 5.4 Literacy rate..................................................................................................................... 27 5.5 Highest class completed .................................................................................................. 27 5.6 Immunisation ................................................................................................................... 29 5.7 Maternal health care ........................................................................................................ 29 5.8 Housing conditions .......................................................................................................... 30 5.9 Percentage of income shares by poverty status ............................................................... 31 5.10 Durable goods.................................................................................................................... 316. Conclusion.............................................................................................................................. 32Appendix A: Confidence intervals for poverty measures by region and period.......................... 35Appendix B: Confidence intervals for poverty measures by province and region ,2001 .......... 36Appendix C: Hypothesis testing ................................................................................................ ...37References..................................................................................................................................... 40 iii
    • List of TablesTable 1: Poverty indices by province and region.......................................................................... . 6Table 2: Incidence of poverty by household characteristics......................................................... 16Table 3: Incidence of poverty by characteristics of the household head .................................... . 19Table 4: Household size, composition, and dependency ratio by poverty status ....................... . 23Table 5: Education indicators by poverty status,2001 ................................................................ . 25Table 6: Health indicators by poverty status,2001...................................................................... . 28Table 7: Housing conditions by poverty status,2001.................................................................. . 30Table 8: Main source of income by poverty status, 2001 ........................................................... . 31Table 9: Percentage of households with durable items by poverty status, 2001 ........................ .32 iv
    • List of FiguresFigure 1: Poverty rates over time.................................................................................................. . 5Figure 2: Headcount ratio and agricultural growth......................................................................... 7Figure 3: Incidence of povery by region....................................................................................... . 8Figure 4: Incidence of poverty and contribution to total poverty by region, 2001 ...................... . 8Figure 5: Incidence of poverty by province.................................................................................. . 9Figure 6: Incidence of poverty and contribution to total povery by province, 2001 .................. . 10Figure 7: Cumulative distribution functions of per adult equivalent consumption expenditure . 11Figure 8: Cumulative distribution functions of per adult equivalent consumption expenditure byregion, 2001 ................................................................................................................................ . 12Figure 9:Cumulative distribution functions of per adult equivalent consumption expenditure byprovince, 2001 .............................................................................................................................. 12Figure 10A: Cumulative distribution functions of per adult equivalent consumption expenditureby household size, 2001.............................................................................................................. . 13Figure 10B: Cumulative distribution functions of per adult equivalent consumption expenditurewith adult and different equivalent scales (equal weight), 2001 .................................................. 14Figure 10C: Cumulative distribution functions of per adult equivalent consumption expenditurewith adult and different equivalent scales(child=0.6), 2001....................................................... . 14Figure 11: Headcount by household size, 2001 ......................................................................... . 15Figure 12: Contribution to total poverty ..................................................................................... . 15Figure 13: Headcount ratio by dependency ratio, 2001.............................................................. . 17Figure 14: Headcount ratio by housing condition, 2001............................................................. . 17Figure 15: Headcount ratio by landownership, 2001.................................................................. . 18 v
    • Figure 16: Headcount ratio by level of education of household head, 2001 ............................... 18Figure 17: Headcount ratio by literacy of household head, 2001 ............................................... . 20Figure 18: Headcount raio by sex of hhold head, 2001 ................................................................ 20Figure 19: Headcount ratio by status of employment of household head, 2001......................... . 21Figure 20: Headcount ratio by sector of employment of household head, 2001 ....................... . 21Figure 21: Headcount ratio by occupation of household head, 2001 ...............................................Figure 22: Dependency ratio by poverty status, 2001 ................................................................ . 23Figure 23: Percentage of population that has ever attended school by poverty status, 2001 ..... . 24Figure 24: Left primary school before completing primary level by poverty status, 2001 ........ . 24Figure 25: Gross enrolment rate by poverty status, 2001 ............................................................ 26Figure 26: Literacy by poverty status, 2001 ............................................................................... . 27Figure 27: Highest class completed by poverty status, 2001........................................................ 27Figure 28: Average number of years of schooling by consumption decile ................................. .28Figure 29: Percentage of children aged 12-23 months that have been fully immunised by povertystatus, 2001 ................................................................................................................................. . 29Figure 30: Pre and post natal care consulatation by poverty status, 2001 .................................. . 29Figure 31: Access to facilities (electricity,gas and telephone) by poverty status, 2001 ............. . 30 vi
    • Executive SummaryThe objective of this paper is to present “A Profile of Poverty in Pakistan” which is useful forbroadening and deepening our understanding about different dimensions of poverty. Fivedata sets including HIES 1992-93, 1993-94, 1996-97 & PIHS 1998-99 & 2000-01, conductedby Federal Bureau of Statistics have been used for poverty analysis.Consumption aggregate has been used as a welfare indicator. It includes both actual andimputed expenditure. Some expenses such as taxes, fines and expenses on marriage orfuneral and durable items are not included in the consumption aggregate.While consumption expenditure is recorded at the household level, it needs to be measured atthe individual level. While adjusting household expenditure in order to get per adultequivalent consumption expenditure, a simple scale has been used. This scale weights 0.8 toindividuals younger than 18 years and 1 for all other individuals. Keeping in view the spreadof survey over a year, Paasche’s price index at primary sampling unit level has beencomputed in order to represent welfare indicator in real values.The poverty line Rs. 673.54 as notified by the Planning Commission vide letter No.1(41)/Poverty/PC/2002, dated 16.8.2002 has been used as a base poverty line. The basepoverty line has been adjusted over time by inflation rate between household surveys in orderto keep the poverty line constant. Foster, Greer and Thorbecke class of poverty measureshave been used as an aggregating index.This paper presents poverty estimates for 1992-93, 1993-94, 1996-97 1998-99 and 2000-01.The poverty estimates have increased over this period with the exception of 1996-97, where adecline has been observed. The incidence of poverty at national level was around 25 percentin 1992-93 which increased to 34 percent approximately in 2000-01. Similarly, poverty gapand severity of poverty increased over time. The factors responsible for this increase inpoverty rates are low GDP growth rate, public finance crisis, problem of external finance,decrease in formal employment opportunities, cut in subsidies and sharp rise in utility rates.The difference in the incidence of poverty between urban and rural areas has increased overthis period. Headcount ratio was 20 percent in urban areas in 1992-93 and it rose toapproximately 23 percent in 2000-01 depicting a moderate increase of 3 percentage pointsover this period. Rural areas depict a remarkable rise of around 12 percentage points in vii
    • headcount ratio from 27.63 percent in 1992-93 to 39.26 percent in 2000-01. Poverty gap andseverity of poverty in urban and rural areas almost doubled during this period.Poor are concentrated in rural areas. It is important that rural livelihoods are improved inorder to ensure that growth benefits the poor. The policy agenda may involve improvementin access to land, agricultural productivity, price incentives and credit arrangements. There isalso a critical need for major improvement in rural infrastructure.PIHS 2000-01 has been used to identify the characteristics of the poor. Total dependencyratio is higher in poor households (115 percent) than non-poor (79 percent). The rate of everattended school is 57 percent for non-poor compared to 37 percent for poor. Similarly, alarge number of children in poor households leave school before completing primary level.Financial costs are more important as a reason for leaving before completing primary leveland never attended school for the poor. Primary gross enrolment rate for poor is about 54percent and 85 percent for non-poor. Primary net enrolment rate is 31 percent for poorcompared to 50 percent for non-poor. There are also wide differences between poor and non-poor with respect to gross and net enrolment rate at middle and matric level.Health indicators are also lower for poor than non-poor. The percentage of children aged 12-23 months fully immunized is 43 percent for poor whereas it is 60 percent for non-poor.About 23 percent poor women went for prenatal care consultation compared to 43 percent fornon-poor. Poor women mostly attend government hospitals/clinics in contrast to non-poorwho prefer private hospitals/clinics.Housing conditions are also worse for poor. Only 16 percent of poor population has access topiped water for drinking compared to 29 percent for non-poor. Similarly, 27 percent of poorlive in houses having flush toilet compared to around 55 percent of non-poor. In rural areas65 percent of poor don’t have toilet in their house.There are three policy messages with respect to education. First, literacy rates may beimproved. Second, policy makers should find ways and means to increase enrolment ratesand reduce dropout rates. Third, simply an increase in enrolment rate will not be sufficient toreduce poverty level. Level of educational attainment must be improved at least to middlelevel in order to reduce poverty significantly.Though health indicators have improved over time still they are low particularly for poorpeople. This situation demands public policy to focus particularly in rural areas on raising viii
    • health expenditure and aiming on prevention and control programmes, especially in the areaof reproductive health, child health, nutrition deficiencies and communicable and infectiousdiseases. ix
    • A Profile of Poverty in Pakistan1 IntroductionReducing poverty has the remained main objective of policy makers but it has gained moreimportance since the adoption of MDGs. In order to design poverty reduction strategies, it isvery important for policy makers to know who are the poor? How many poor are there? Wheredo they live and what is their social and economic profile? The main objective of this paper is toprovide baseline poverty profile by answering these questions. Poverty profile is useful forbroadening and deepening our understanding about the different dimensions of poverty andmeasuring the degree to which the government has been successful in reducing the poverty overtime.2 DataThis paper uses five data sets for poverty analysis i.e., HIES 1992-93, 1993-94, 1996-97 & PIHS1998-99 and 2000-01. The sample size of these household surveys is substantial enough to allowrepresentative estimates to be obtained for each province and region. Name of survey Sample size Urban Rural Overall HIES 1992-93 5586 9006 14592 HIES 1993-94 5632 9036 14668 HIES 1996-97 5447 8814 14261 PIHS 1998-99 5527 9152 14679 PIHS 2000-01 5536 9169 14705These household surveys conducted by Federal Bureau of Statistics provide comprehensiveinformation about household consumption expenditure and income. PIHS 1998-99 and 2000-01provide rich information about different socio-economic indicators that are essential for povertyprofiling. This paper uses PIHS 2000-01 for identifying different socioeconomic characteristicsof the poor and non-poor.Minor data cleaning has been made. In some cases data entry errors were observed. These dataentry errors were corrected simply by moving the decimal point in either direction throughcomputer programming in order to make data meaningful. Moreover, there were a few caseswhere quantities for food items were missing. In missing cases new values were obtained bydividing the value of that item by median unit price of that item within the primary samplingunit. 1
    • The structure of the paper runs as follows. The next section describes the methodology ofestimating poverty rates, followed by section 4 wherein poverty comparisons are discussed.Section 5 explains socioeconomic characteristics by poverty status. The last section concludesthe paper.3 Methodology3.1 Choice of welfare indicatorIn developing countries, consumption is more appropriate than income as welfare indicator.First, income is interpreted as a measure of welfare opportunity while consumption as a measureof welfare achievement. Second, it is generally believed that survey respondents are more willingto reveal their consumption pattern than their income. Third, consumption is measured betterthan income in developing countries because of difficulties in defining and measuring income forself-employed. Finally, income is subject to seasonal variability while consumption tends to beless variable. This paper uses consumption as a welfare indicator.3.2 Consumption aggregateConsumption aggregate is comprehensive and consists of both actual and imputed expenditure. Itincludes not only actual purchases but also self-produced and consumed items or consumption ofitems that were received as gift or assistance or wage and salary in kind. Thus consumptionaggregate includes food items, fuel and utilities, housing (rent, imputed rent and minor repair),frequent nonfood expenses (household laundry and cleaning personal care products and services)and other nonfood expenses (clothes, footwear, education, and health related expenses).However, some expenses such as taxes, fines and expenses on marriage or funeral and durableitems are not included in the consumption aggregate because these are not related to livingstandards.3.3 Adjustment of consumptionWhile consumption expenditure (food and nonfood) is recorded at the household level, welfareneeds to be measured at the individual level. The general practice is to divide household incomeor consumption expenditure by the total number of household members without making any 2
    • adjustment for household composition. This methodology is not much convincing as it givesequal welfare ranking to two households with same total income/consumption and with samenumber of household members even if one of the households is dominated by adults and theother by children. Nutrition based adult equivalent scales, which differentiate, betweenhouseholds on the basis of sex and age are also used to transform the number of persons in ahousehold to adult equivalents. The application of nutrition based equivalent scales to anyexpenditure other than food expenditure is questionable. Its use is defendable when foodexpenditure occupies a comprehensive share of total expenditure. While adjusting householdexpenditure in order to get per adult equivalent consumption expenditure, this paper uses simpleequivalent scale that weights 0.8 to individuals younger than 18 years and 1 for all otherindividuals as food expenditure represents only about 50 percent of the total consumptionexpenditure.3.4 Price adjustmentIt is necessary to represent the welfare indicator in real values as households face different pricesduring the year of the survey. Laspayer’s price indices as calculated by the Federal Bureau ofStatistics are not suitable for using price adjustment because these indices don’t considerdifferences between urban and rural areas or between provinces. Paasche’s price index calculatedat the primary sampling unit has been used in order to convert the welfare indicator in realvalues. Though, household income and expenditure surveys don’t always provide information onprices but it is still possible to calculate spatial price index by means of unit values that areobtained by dividing expenditure per food and fuel items by quantity consumed. Paasche’s priceindex has been calculated at the primary sampling unit level by using the median prices andaverage budget shares in each primary sampling unit.3.5 Poverty lineUsing PIHS 1998-99, Federal Bureau of Statistics estimated absolute poverty line Rs. 673.54 oncalories 2350 per adult equivalent per day with calorie based approach. This poverty line wasnotified, as national poverty line by Planning Commission vide Letter No. 1 (41)Poverty/PC/2002, dated 16.8.2002. This paper uses Rs. 673.54 as a base poverty line for the 3
    • whole country (urban and rural areas) for poverty analysis. This poverty line has been adjustedfor other years in the analysis by the inflation rate between the two household surveys so that thebase poverty line remains constant and poverty measures are consistent and comparable overtime and across regions. It is highlighted that the level of inflation between two householdsurveys is calculated using monthly official consumer price index computed by the FederalBureau of Statistics. While conducting household survey, different percentages of interviewstake place in different months and these facts need to be considered when inflation rate betweentwo household surveys is computed.3.6 Choice of aggregatorAfter the finalization of poverty line, one has to choose the aggregating index. The most popularused measures of poverty are the Foster, Greer and Thorbecke class of poverty measures. Theseinclude headcount ratio, poverty gap and severity of poverty. Headcount ratio is defined as theproportion of population below the poverty line. It is easy to calculate but it does not take intoaccount depth of poverty. Poverty gap reflects the average short fall of the incomes/consumptionof the poor expressed as a share of the poverty line. It considers depth of poverty but does nottake into account the distribution of income amongst the poor. Severity of poverty is the squareof poverty gap. It is sensitive to distribution of among the poor as more weight is given to thepoorest below the poverty line.4 Poverty comparison4.1 Spatial poverty comparisonNational povertyIt is useful to examine how poverty rates vary across regions and over time. Comparison ofpoverty across regions helps in targeting poverty alleviation programmes to meet the needs of thepoor while over time it is useful for policy makers to monitor the effectiveness of pastprogrammes in reducing the intensity of poverty among various socioeconomic groups of thepoor. 4
    • Though this paper presents poverty estimates for 1992-93, 1993-94, 1996-97, 1998-99 and 2000-01 but the main focus is on 2000-01.There are three main poverty measures that are used for poverty analysis. They includeheadcount, poverty gap and severity of poverty.The poverty estimates have increased over Figure 1: Poverty rates over timethis period with the exception of 1996-97 40.00 34.46 31.08 28.17where a decline has been observed. The 30.00 25.46 25.78 % 20.00incidence of poverty at national level was 10.00 4.27 5.22 4.38 6.58 7.03 1.10 1.44 1.14 2.06 2.13around 25 percent in 1992-93 which has 0.00 1992-93 1993-94 1996-97 1998-99 2000-01increased significantly over time, Head count Poverty gap Severity of povertyamounting to 34 percent approximately in2001, indicating an increase of 9 percentage points.The last two surveys (PIHS 1998-99 & 2000-01) reveal that the proportion of population underpoverty line has increased from 31.08 percent to 34.46 percent depicting an increase of 3.38percentage points. Changes in headcount ratio between years are statistically significant exceptbetween 1992-93 and 1996-97 when, they are statistically insignificant (Appendix C).Similarly, a substantial rise in poverty gap and severity of poverty occurred between 1992-93and 2000-01. Poverty gap was 4.27 percent in 1992-93 compared to 7.03 percent in 2000-01.Severity of poverty has increased from 1.10 percent to 2.13 percent over this period. Changes inpoverty gap and severity of poverty between years are statistically significant except between1992-93 & 1996-97 and 1998-99 & 2000 (Appendix C).Between 1998-99 and 2000-01 poverty gap increased form 6.58 percent to 7.03 percent andseverity of poverty from 2.06 percent to 2.13 percent. A sharp rise in headcount compared to thepoverty gap and severity of poverty over the last two surveys reveals that a substantial proportionof poor population lies close to the poverty line and they are most likely to cross it in thepresence of better performance of the economy. 5
    • Table 1: Poverty indices by province and region Region and 1992-93 1993-94 1996-97 1998-99 2001-02 province HIES HIES HIES PIHS PIHSHeadcount ratioUrban areas 19.99 15.39 15.84 21.37 22.69Punjab 21.24 17.01 16.61 24.24 23.33Sindh 16.65 11.33 11.77 15.57 20.06NWFP 24.37 25.31 26.92 27.13 29.05Balochistan 30.44 15.62 22.98 22.94 26.18Rural areas 27.63 33.54 30.17 35.13 39.26Punjab 25.37 32.95 27.89 34.62 35.86Sindh 28.56 30.24 19.22 34.00 45.07NWFP 34.91 38.22 42.36 43.72 43.61Balochistan 26.21 36.75 41.61 21.34 37.45Overall 25.46 28.17 25.78 31.08 34.46Punjab 24.25 28.55 24.66 31.62 32.24Sindh 23.29 21.50 15.39 26.01 35.32NWFP 33.62 36.37 40.23 41.28 41.47Balochistan 26.77 34.36 37.69 21.55 35.49Poverty gapUrban areas 3.43 2.74 2.41 4.27 4.55Punjab 3.71 3.22 2.60 5.04 5.23Sindh 2.74 1.82 1.60 2.79 3.32NWFP 4.41 4.20 4.51 5.66 5.22Balochistan 4.82 2.14 3.53 3.95 4.52Rural areas 4.60 6.25 5.25 7.55 8.04Punjab 4.40 6.47 4.90 7.53 7.48Sindh 5.03 5.18 3.03 7.27 10.03NWFP 4.94 6.53 7.33 9.47 7.86Balochistan 4.28 6.72 8.02 3.76 6.35Overall 4.27 5.22 4.38 6.58 7.03Punjab 4.21 5.57 4.24 6.81 6.83Sindh 4.02 3.63 2.29 5.32 7.41NWFP 4.87 6.19 6.94 8.91 7.47Balochistan 4.35 6.20 7.07 3.79 6.03Severity ofpovertyUrban areas 0.89 0.69 0.60 1.29 1.35Punjab 0.95 0.87 0.68 1.58 1.68Sindh 0.70 0.40 0.33 0.73 0.84NWFP 1.29 1.05 1.13 1.89 1.35Balochistan 1.13 0.43 0.94 1.03 1.14Rural areas 1.18 1.76 1.39 2.38 2.44Punjab 1.15 1.90 1.33 2.39 2.34Sindh 1.40 1.47 0.72 2.33 3.19NWFP 1.11 1.63 1.89 2.98 2.09Balochistan 1.07 1.70 2.29 1.02 1.53Overall 1.10 1.44 1.14 2.06 2.13Punjab 1.09 1.61 1.13 2.15 2.15Sindh 1.09 0.97 0.52 1.64 2.27NWFP 1.13 1.55 1.78 2.82 1.98Balochistan 1.08 1.56 2.01 1.02 1.46 6
    • In absence of any formal modeling of determinants of poverty due to very few discontinuousobservations, one can conjecture that the following factors may be responsible for an increase inpoverty during this period are low GDP growth rate, public finance crisis, problem of externalfinance, decrease in formal employment opportunities due to privatization of government ownedenterprises and downsizing in public sector, cut in subsidies and sharp rise in utility rates.When we analyze the dip in poverty rates in 1996-97 we get some piece of information that maybe helpful in understanding the Figure 2: Headcount ratio and agriculture growthsituation. Given the primary role ofagriculture sector in the rural economy, 40 15 30 10its performance is likely to be critical in % 5 % 20 0explaining the observed trends in rural 10 -5 0 -10poverty. Agriculture growth rate 2 93 -94 -95 -96 -97 -98 -99 -00 -01 -02 1-9 2- 3 4 5 6 7 8 9 0 1appears to affect poverty with one-year 1 99 199 199 199 199 199 199 199 199 200 200lag as is evident from the Figure 2. A Headcount(left scale) Agriculture growth rate (right scale)good performance of agriculture in1995-96 may be one of the causes leading to reduction in poverty in 1996-97. Moreover, wagerates also have an effect on poverty. Weighted average of nominal growth of labour wages(unskilled labour) in the construction sector in the 12 biggest cities of Pakistan was remarkablyhigher in 1996 and 1997 compared to other succeeding years. The rate of growth was around 17percent in 1996 and 1997 followed by 5.79 percent in 1998, 6.52 percent in 1999, and 4.12percent in 2000 and 1.70 in 2001. Furthermore, household size in 1996-97 was lower than 1993-4 by 0.2 person. Apparently it is underestimated in rural Sindh where very few householdsindicated servants and other relatives as household member when the definition of householdmember is the same for all these household surveys. Rural poverty in Sindh is underestimated asit is 19 percent in 1996-97 compared to 30 percent in 1993-94 and 34 percent in 1998-99.Poverty comparison by urban and rural areasPoverty reduction policies aim to reach disadvantaged groups and backward areas effectively andefficiently. Poverty profile is useful in targeting development resources towards poor areas. 7
    • Which region should be given priority in targeting? Poverty estimates provide an easy answer tothis question. Incidence of poverty indicates Figure 3: Incidence of poverty by regionthat rural areas have more poverty than urban 50areas and rural poverty has increased faster 39.26 40 33.54 35.13 27.63 30.17than urban poverty. The difference in the 30 % 20 21.37 22.69 19.99 10 15.36 15.84incidence of poverty between urban and rural 0areas was around 8 percentage points in 1992- 1992-93 1993-94 1996-97 1998-99 2000-0193, which doubled in 2000-01. Headcount ratio Urban Ruralwas about 20 percent in urban areas in 1992-93and it rose approximately to 23 percent in 2000-01 depicting a moderate increase of 3 percentagepoints over this period. Even between 1998-99 and 2000-01 incidence of poverty in urban areasincreased marginally from 21.37 percent to 22.69 percent. Similarly, poverty gap and severity ofpoverty experienced slight rise over the period.Rural areas depict a remarkable rise of around 12 percentage points in headcount ratio from27.63 percent in 1992-93 to 39.26 percent in 2000-01. Poverty gap and severity of povertyalmost doubled during this period. Changes in poverty rates between urban and rural areas arestatistically significant over the period (Appendix C).The magnitude of regional contributions to national poverty depict that about 81 percent of allthe poor are concentrated in rural areas while the share of rural areas in total population is 71percent (Figure 4).Poor are concentrated in rural areas. It is important that rural livelihoods are improved in orderto ensure that growth benefits the poor. Figure 4: Incidence of poverty and contribution to total poverty by region, 2001This implies that agriculture growth is aprecondition in order to improve the 120 100 100 80.94livelihoods of the poor in rural areas 80 % 60 39.26 34.46because agriculture accounts for about 40 22.69 19.06 2023 percent of GDP, 41 percent of labour 0 Overall Rural Urbanforce and provides a livelihood for Headcount Contribution to total povertyabout two-third of population. Thepolicy agenda may involve improvement in access to land, agricultural productivity, priceincentives 8
    • and credit arrangements. There is also a critical need for major improvement in ruralinfrastructure – improved water supply, better irrigation and road facilities, communications andmore effective research and extension activities. Moreover, the inequality in land distribution andthinness of agricultural labour markets suggest that the non-formal sector is very important forenhancing the earning power of the poor. So public policy should also improve opportunities inthe labour-intensive non-formal sector.Poverty comparison by provincePoverty increased in all provinces from 1992-93 to 2000-01. Headcount ratio was highest inNWFP (33.62 percent) in 1992-93 and it maintains its position in 2000-01 with 41.47 percent.Incidence of poverty increased sharply in Figure 5: Incidence of poverty by provinceSindh and Balochistan between 1998-99 50and 2000-01. In Sindh headcount ratio 40 30 %increased from 26.01 percent to 35.32 20 10depicting a rise of 9 percentage points over 0this period. Balochistan experienced a steep Punjab Sindh NWFP Balochistanrise of 14 percentage points in headcount 1992-93 1993-94 1996-97 1998-99 2000-01ratio over this period from 21.55 to percent 35.49 percent. This sharp rise in poverty in Sindh andBalochistan is the outcome of drought that affected badly the rural areas of these two provincesduring this period. Rural poverty rose steeply in Sindh and Balchistan between 1998-99 and2000-01 from 34 percent to 45 percent and 21 percent to 37 percent respectively. Changes inheadcount ratio in rural areas between 1998-99 & 2000-01 are statistically significant in Sindhand Balochistan (Appendix C).Drought had more significant effect on rural areas in Sindh and Balochistan than on Punjab andNWFP. Between 1998-99 and 2000-01 production of wheat and rice decreased by 17 percentand 13 percent respectively in Sindh, that affected rural poverty (Pakistan Statistical Yearbook2002). Balochistan was also badly affected by drought and it experienced steep rise in ruralpoverty from 21 percent in 1998-99 to 37.45 percent in 2000-01. 9
    • Poverty remained stable in Punjab and NWFP between 1998-99 and 2000-01. Between these twoyears production of cotton, wheat and rice increased by 29 percent, 17 percent and 18 percentrespectively in Punjab. In NWFP wheat production decreased but this reduction was offset byincrease in maize crop (Pakistan Statistical Yearbook 2002). Changes in poverty rates arestatistically insignificant in Punjab and NWFP between the last two surveys (Appendix C).As far as the contribution tototal poverty is concerned, Figure 6: Incidence of poverty and contribution to total poverty by province, 2001Figure 6 indicates that Punjab 120province contributed around 52 100.00 100percent to total poverty, 80 52.48 % 60 41.47followed by Sindh (26.16 40 34.46 32.24 35.32 35.49 26.16 16.80percent), NWFP (16.80 20 4.56 0percent) and Balochistan (4.56 Overall Punjab Sindh NWFP Balochistanpercent). The evidence Headcount Contribution to total povertysuggests that poverty reductionstrategies should focus on rural Punjab and rural Sindh that are the habitat of majority of the poorpopulation.Checking the robustnessIn order to design poverty reduction strategies, policy makers are interested in whether povertyhas increased or decreased and which areas/regions have more poverty. Sensitivity analysisanswers these questions. Sensitivity analysis is undertaken by comparing the ranking ofcumulative distribution functions of welfare indicator over time or region. The lines show thefraction of population on the vertical axis whose per equivalent adult consumption is less orequal to the amount indicated on the horizontal axis. If a cumulative distribution function forexample “A” in one year or one region attaches a higher proportion of the population to each peradult equivalent consumption level compared to another cumulative distribution function forexample “B” then distribution “A” has more poverty than distribution “B” independent of anypoverty line. The finding of more poverty in distribution “A” is robust. 10
    • Figure 7: Cumulative distribution functions of per adult equivalent consumption expenditure Pihs01 Pihs99 Hies97 Hies94 .8 .6 F ctio o co su p n ra n f n m tio 2001 .4 1998-99 1993-94 .2 1996-97 0 250 500 750 1000 Per adult equivalent consumption expenditureThe Figure 7 presents the cumulative distribution functions of the welfare indicator for differentyears where per adult equivalent consumption expenditure is expressed at the prices of 2000-01.The cumulative distribution functions present robust results as the curves don’t cross each other.Ranking of these distributions don’t change what ever poverty line is used.It shows that the distribution of per adult equivalent consumption expenditure for 1996-97 liesentirely below and to the right of other distributions followed by 1993-94, 1998-99 and 2001. Inother words, poverty was lowest in 1996-97 and highest in 2001 whatever poverty line is set.Focussing on inter-region distribution in 2001, distribution of rural areas dominates thedistribution of urban areas indicating more poverty in rural areas than urban areas (Figure 8).Cumulative distribution functions of provinces (Figure 9) cross each other at several points and itis not possible to distinguish their welfare rankings. 11
    • Figure 8: Cumulative distribution functions of per adult equivalent consumption expenditure by region, 2001 Urban Rural .6 Rural Fraction of population .4 Urban .2 0 250 500 750 1000 Per adult equivalent consumption expenditureFigure 9: Cumulative distribution functions of per adult equivalent consumption expenditure by province, 2001 Punjab Sindh NWFP Balochistan .8 Balochistan .6 Fraction of consumption NWFP .4 Sindh Punjab .2 0 250 500 750 1000 Per adult equivalent consumption expenditure 12
    • It is argued that use of different equivalent scales change correlation between poverty andhousehold size. To answer this issue, we compare the cumulative distribution functions ofhousehold of different composition and again compare them by applying different equivalentscales. As expected Figure 10A presents robust results indicating poverty increases as thehousehold size rises. Households with 1-2 persons are richer than other households. On the otherside households with persons 8 and/or above have higher poverty. These results don’t changewhat ever poverty line is used.In Figure 10B households with two adults and varying number of children are compared andeach individual has equal weight. While in figure 10C children under age 18 have weight 0.6meaning children below 18 years need 60 percent of the consumption of an adult.The Figure 10B and 10C depict that household with two adults and no children are richer. As thenumber of children increases, poverty also increases. The results hold true throughout thedistribution. The distributions don’t cross each other suggesting that larger households are poorerand use of different scales don’t reverse the ranking. Figure 10A: Cumulative distribution functions of per adult equivalent consumption expenditure by household size, 2001 hhsize1 hhsize2 hhsize3 hhsize4 .8 8 + Persons 5-7 Persons .6 Fraction of population 3-4 persons .4 .2 1-2 Persons 0 250 500 750 1000 Per adult equivalent consumption expenditure 13
    • Figure 10B: Cumulative distribution functions of per adult equivalent consumption expenditure of households with adult and different equivalent scales, 2000-01 (Equal weight) hhsize1 hhsize2 hhsize3 hhsize4 .8 2 adults + 5 children .6 2 adults + 4 children Fraction of population 2 adults + 3 children 2 adults + 2children .4 .2 2 adults + 1 child 2 adult 0 250 500 750 1000 Per capita consumption expenditureFigure 10C: Cumulative distribution functions of per adult equivalent consumption expenditure of households with adult and different equivalent scales, 2000-01 hhsize1 hhsize2 hhsize3 hhsize4 .8 hhsize5 hhsize6 .6 2 adults + 5 children Fraction of population 2 adults + 4 children 2 adults + 3 children .4 2 adults + 2 children .2 2 adults 0 250 500 750 1000 Per adult equivalent consumption (children=0.6 ) 14
    • PIHS 2001 is the latest household survey available and it provides rich information aboutdifferent socioeconomic indicators. This data set has been used to identify the differentdimensions of poverty and characteristics of the poor.4.2 Poverty comparison by household characteristicsTable 2 presents head count ratio by household characteristics, which are useful for povertycomparison.4.2.1 Poverty by household sizeThe impact of household size on poverty is well established. As the household size increases sodoes poverty. PIHS 2001 corroborates that larger households have higher incidence of povertythan smaller ones. The incidence of poverty is highest (49 percent) in households consisting of11 persons or higher and it is lowest (2.72 Figure 11: Headcount ratio by household size, 2001percent) if household size is one. Head Urban Rural Overall 60count ratio increases monotonously as the 50household size increases. There are wide 40 % 30differences in the incidence of poverty when 20compared by urban and rural areas. Larger 10 0households are likely to have more young 1 2 3 4 5 6 7 8 9 10 >=11children, which pose financial burden on the Household sizehouseholds due to high cost of educationand health.Another way of looking at the distribution of Figure 12: Contribution to total povertypoverty is in terms of the contribution of 35different size of households to national 30Poverty. Table 2 indicates that households 25 20consisting of 11 persons or greater % 15contribute 34 percent approximately to total 10 5national poverty whereas households with 0 1 2 3 4 5 6 7 8 9 10 >=11size 6 or lower contribute around 16 percent. Household sizeSince larger households tend to have higher 15
    • Table 2: Incidence of Poverty by household characteristics, 2001 Household Urban Rural Overall Percentage of: Characteristics areas areas Population Poor Non-poor Household size 1 Person 00.00 04.50 02.72 00.16 00.01 00.24 2 Persons 00.69 04.27 03.23 01.37 00.13 02.02 3 Persons 03.17 12.01 09.47 02.89 00.79 03.99 4 Persons 05.08 16.34 13.30 05.85 02.26 07.74 5 Persons 09.28 21.36 17.21 09.23 04.61 11.66 6 Persons 14.33 25.88 22.44 11.97 07.80 14.17 7 Persons 19.09 39.73 33.88 13.47 13.24 13.59 8 Persons 20.84 43.80 37.05 12.60 13.55 12.10 9 Persons 30.93 44.66 40.99 10.79 12.84 09.71 10 Persons 34.39 51.95 46.65 07.99 10.82 06.50 >=11 Persons 37.23 54.06 49.42 23.68 33.96 18.27 Overall 22.69 39.26 34.46 100.00 100.00 100.00 Dependency ratio Ratio = 1.0 05.93 10.99 10.00 01.19 00.34 01.64 1.0< Ratio <= 1.5 17.06 28.73 26.76 05.23 03.98 05.90 1.5< Ratio <= 2.0 18.83 38.08 34.29 12.48 12.18 12.64 2.0< Ratio <= 3.0 20.42 40.73 34.91 23.20 23.06 23.28 Ratio >3.0 25.26 42.23 36.65 57.90 60.43 56.53 Land ownership <= 1.5 acres - - 36.87 22.82 29.66 20.10 1.5 < acres<=3.5 - - 29.53 21.85 22.76 21.49 3.5 < acres<=7.5 - - 25.91 24.90 22.74 25.75 7.5 < acres<=15 - - 24.95 18.72 16.47 19.61 15 < acres<=25 - - 22.64 07.22 05.77 07.80 > 25 acres - - 16.42 04.49 02.60 05.24 Housing Electricity Yes 21.47 35.50 30.43 - - - No 67.27 48.14 48.83 - - - Gas Yes 15.14 30.91 17.33 - - - No 36.15 39.65 39.18 - - - Telephone Yes 4.56 11.75 7.17 - - - No 29.14 41.07 38.16 - - - Drinking water - - - Piped water 17.28 35.65 23.08 - - - Hand pump 45.33 43.10 43.31 - - - Motorised pumping/tube 21.28 21.92 21.67 - - - well Well 41.12 46.74 46.35 - - - Other 21.82 40.84 38.72 - - - Toilet - - - Flush connected to 13.50 19.79 13.82 - - - public sewerage Flush connected to pit 22.89 20.69 21.36 - - - Flush connected to open 32.17 32.59 32.36 - - - drain Dry raised/pit latrine 48.29 43.82 44.37 - - - No toilet in the house 56.80 45.75 46.12 - - - 16
    • Proportion of children so poverty might be reduced significantly if households were to havefewer children.4.2.2 Poverty by dependency ratioDependency ratio is defined as the Figure 13: Headcount ratio by dependencynumber of household members ratio, 2001 70 60.43divided by the number of earners in 60 50the household. Poverty increases as 40 34.29 34.91 36.65 % 26.76 23.06 30dependency ratio rises. It is lowest 20 10 12.18 10 3.98(10 percent) in households where 0 0.34dependency ratio is 1 and highest = 1.0 =1 .5 =2 .0 =3 .0 > 3.0 tio o< o< o< tio Ra ati ati ati Raaround 37 percent with dependency < R < R < R 1.0 1.5 2.0ratio greater than three. Headcount Contribution to national poverty4.2.3 Poverty by access to amenitiesIt is argued that households having access to amenities are most likely less poor compared tothose without them. This argument is Figure 14: Headcount ratio by housing condition, 2001supported by PIHS 2001. Poverty isabout 30 percent in household that 100 90 Electricityhave access to electricity compared to 80 Gas 70around 49 percent having no 60 Telephone % 50 Noelectricity. Similarly, households with 40 Yes 30access to gas and telephone 20 10connection (land) have lower poverty 0 U R T U R T U R Trates than houses without them. Thereare stark variations in the incidence of poverty between urban and rural areas. Moreover, povertyis about 23 percent in those households where main source of drinking water is piped water andit rises to 46 percent where the main source is well. Further the percentage of population inpoverty is about 46 percent where household has no toilet in the house compared to 14 percentapproximately if house has a flush connected to public sewerage. 17
    • 4.2.4 Poverty and access to landPoor households typically own less land Figure 15: Head count ratio by landowership,than non-poor. About 37 percent of the 2001poor people live in households, owning Headcount Contribution to national povertyland 1.5 acres or less and contributing 30 36.87 40percent approximately to total poverty. As 35 29.53 30 29.66 25.91 24.95 22.64 25 22.76 22.74the size of land ownership increases, 20 16.42 % 15 16.47poverty declines monotonically but with 10 5 5.77 2.6 0less margin. It is important to highlight that re 3 7 1 2 re .5 ac s <= cres <= s <= cres <= >25 ac <= 1 .5 < acre a acre avariation in quality of land is important 1 3.5 < 7.5 < 15 <while analysing poverty by landownership. Moreover, poverty results may be interpreted cautiously due to drought affect duringthis survey period.4.3 Poverty by household head characteristicsTable 3 shows headcount ratio by the characteristics of the head of household.4.3.1 Poverty by educational attainment level of household-headEducation plays an important role in accelerating economic growth and reducing poverty. So therelationship between education and poverty demands much more attention. There is an inverserelationship between poverty and education of the household head. The higher educated are morelikely to have greater incomes and thus, have lower chances to be poor. Figure 16: Headcount ratio by level of education of household head, 2001 70 63.49 60 50 43.43 40 37.14 % 33.27 30 20 14.37 22.96 8.74 17.31 14.56 10 5.09 4.99 1.48 1.228.72 0.068.1 0 Never attended Less than Completed Completed Completed Completed Completed Diploma/other school primary Primary middle Secondary higher higher level secondary Contribution to national poverty Headcount 18
    • Table 3: Incidence of poverty by the characteristics of the household head, 2001Characteristics of the Urban Rural Over Percentage of: household head areas areas All Population Poor Non-poorEducational attainmentNever attended school 35.10 45.46 43.43 50.38 63.49 43.48Less than primary 33.57 38.49 37.14 08.11 08.74 07.77Completed Primary 25.02 36.48 33.27 14.89 14.37 15.16Completed middle 17.90 26.55 22.96 07.64 05.09 08.98Completed Secondary 11.67 22.08 17.31 09.93 04.99 12.53Completed higher 04.71 23.54 14.56 03.51 01.48 04.58secondaryCompleted higher level 04.48 16.04 08.72 04.82 01.22 06.72Diploma/other 00.00 22.96 08.10 00.26 00.06 00.36Missing cases 05.35 48.57 41.20 00.46 00.55 00.41Overall 22.69 39.26 34.46 100.00 100.00 100.00LiteracyLiterate 15.02 30.02 24.03 45.70 31.88 52.97Illiterate 35.86 45.04 43.22 54.30 68.12 47.03Overall 22.75 39.23 34.45 100.00 100.00 100.00SexMale 23.34 40.13 35.27 93.88 96.09 92.71Female 12.89 25.80 21.97 06.12 03.90 07.29Overall 22.69 39.26 34.46 100.00 100.00 100.00Employment statusEmployer - - 20.83 01.34 00.81 01.61Self employed - - 32.46 17.07 16.08 17.60Paid employed - - 37.52 36.34 39.57 34.64Unpaid family worker - - 23.33 00.74 00.50 00.87Owner cultivator - - 26.59 15.79 12.18 17.69Share cropper - - 50.17 06.34 09.22 04.82Contract cultivator - - 34.44 02.28 02.28 02.28Livestock (only) - - 45.92 01.73 02.31 01.43Not economically active - - 18.11 04.51 02.37 05.63Other - - 36.48 13.85 14.66 13.42Overall - - 34.46 100.00 100.00 100.00OccupationLegis.& senior officials - - 04.75 01.27 00.17 01.86Professionals - - 14.91 03.90 01.66 05.11Technicians - - 19.02 03.28 01.78 04.09Clerk - - 18.74 02.97 01.59 03.72Service workers - - 29.45 16.09 13.50 17.48Skilled agr.workers - - 34.58 36.06 35.55 36.34Craft etc workers - - 32.07 08.09 07.39 08.46Plant& machine operators - - 32.62 06.49 06.03 06.73Elementary occupations - - 51.87 21.86 32.32 16.20Industry of employmentAgr.,livestock & hunting - - 38.05 41.58 45.20 39.63Manufacturing - - 32.74 08.48 07.93 08.78Construction - - 55.69 08.36 13.30 05.70Wholesale & retail trade - - 27.63 13.46 10.62 14.99Transport and storage - - 35.99 06.13 06.31 06.04Community,social services - - 27.44 17.67 13.85 19.73Other - - 22.65 04.31 02.79 05.13 19
    • The Figure 16 shows that poverty rates are relatively high for households in which the head ofhousehold has either no schooling (43.43 percent) or completed less than primary (37 percent) orcompleted primary level (33 percent).At higher levels of education, the likelihood of being poor becomes much lower. The resultsuggests that the greatest gains accrue to education beyond primary level. Poverty rate decreasesfrom 33.27 percent with head having primary education to 23 percent approximately whenhousehold head has completed middle level, showing a big fall of about 10 percentage points.Poverty rates fall further with more education and it is around 9 percent where the head isgraduate or higher.4.3.2 Poverty by literacy of household headThe data suggest that poverty is about 43 Figure 17: Headcount ratio by literacy of householdpercent in illiterate household head head, 2001compared to 24 percent in literate 68.12household-head. Contribution to total 31.88 100poverty by households with illiterate head % 50 43.22is 68 percent approximately against their 24.03 0population share of 64 percent. Literate IlliterateThere are three policy messages. First Headcount Contribution to national povertyliteracy rate may be improved. Second, policy makers should find ways and means to increaseenrolment rate and reduce dropout rates. Third, simply an increase in enrolment rate will not besufficient to reduce poverty. Level of educational attainment must be improved at least to middlelevel to make a big dent in poverty. Figure 18: Headcount ratio by sex of household4.3.3 Poverty by sex of household head head, 2001 96.09In developing countries the women are 100disadvantaged in comparison with men. 35.27 50 21.97One indicator of gender gap is whether 3.9female-head households are worse than 0 Male Femalethose headed by male. PIHS 2001 suggest Headcount Contribution to national povertythat the incidence of poverty is higher in 20
    • households having male head than female-headed household. The percentage of populationbelow poverty line is 35 percent in male-headed households compared to female-headhouseholds where this rate is around 22 percent. The people living in female-headed householdsaccount for 6 percent of total population and contribute only 4 percent approximately to nationalpoverty. The lower rate of poverty in female-headed households does not mean that women areearning better than men. In female-headed households, most of adults are either working in otherareas of the country or overseas. The female-headed households receive domestic/foreignremittances. This finding is reversed in cases where female-head is the only person working inthe household. However, it constitutes a small proportion of all female-headed households.4.3.4 Poverty by status of employment of household headHouseholds can escape from or fallin poverty depending upon their Figure 19 : Headcount ratio by status of employment of head, 2001earnings from employment. So it is 60 50useful to look at the relationship 40 %between poverty and employment 30 20status of the head of household. 10 0The Figure 19 indicates that poverty or r c ker r y) r er er ed ed ... pe to nl at th oy ac oy oy va or op (o tiv O plis highest among sharecropper (50 pl pl lti w ly cr ul Em k cu m em al oc ily e fe ic ar m ct st ne om id l fa tra Sh ve Se Papercent) followed by livestock (46 w on Li d on O ai ec C np ot U Npercent) and paid employed (38 Headcount Contribution to total povertypercent). It is lowest among households Figure 20 : Headcount ratio by sector ofwhere head is not economically active. employment of household head, 2001This category includes pensioners and 90 80those receiving income exclusively 70 60 45.2 13.3 50 % 6.31from property such as landowners. The 40 7.93 10.62 13.85 30 55.69 2.79 20 38.05 35.99people who receive remittances are also 10 32.74 27.63 27.44 22.65 0included in this category. The ltu re ing tio n ad e ag e ce s he r cu tur uc l tr tor rvi Ot gri fac nstr tai ds se A nu Co &r e an itydistribution of poor with respect to the Ma le ort un sa sp mm ole Tr an Co Whstatus of employment of household Headcount Contribution to total poverty 21
    • head indicates that paid employed contribute about 40 percent to total poverty. It is therefore,useful to examine what is the sector of employment and occupation of paid employed head. Mostof them are employed in agriculture and construction sector. Figure 20 reveals that poverty rateis around 56 percent, adding 13 percent to total poverty where sector of employment of head isconstruction and it is 38 percent in case of agriculture sector, accounting for around 45 percent ofthe total poor. Both agriculture and construction sector contribute around 58 percent to totalpoverty. Another useful piece of Figure 21: Headcount ratio by occupation ofinformation from the occupation household head, 2001of head is that poverty rate is Elementary occupationsabout 52 percent if the head has Skilled agricultural workers Plant & machine operatorselementary occupation1 and it Craft and related trade workers Service workerscontributes 32 percent to the total Clerk Technicianspoor (Figure 21). It can be Professionals Legislators & senior officialsinferred that informal sector is 0 20 40 60 80 100main habitat of the poor. It %suggests that income-generating Headcount Contribution to national povertypolicies in order to reduce povertyshould focus on the agriculture and construction sector. It should also not ignore those who aredoing elementary job. The poor can reap benefit from policies designed to improve thefunctioning of rural markets, including those of agricultural commodities and inputs. Landcultivation arrangements need to be improved keeping in view of the interests of land cultivators(sharecropper and contract cultivators) where poverty rates are significantly high. Policiesdirected at the formal labour market will not be much productive in reducing poverty. As most ofthe poor people work outside of the regulated labour market, so strategies may be devised toincrease their incomes by improving their income generating capabilities.5 Characteristics of the poorAlthough consumption based poverty measures provide us with an easy tool for measuring thedistribution of living standards of population but they don’t fully capture other characteristics ofthe poor such as literacy, health, and access to water and sanitation. This section presents an over 22
    • view of the distribution of selected non-monetary indicators of household living standards usingPIHS 2001.5.1 Household size and dependency ratioHousehold composition in terms of the size of the household and the characteristics of itsmembers is often quite different for poor and non-poor households.Table 4: Household size, composition, and dependency ratio by poverty status, 2001 Region Average Number of household members in Dependency ratio and household the age group status size 0-4 5-14 15-64 >=65 Total Child Aged Years Years Years YearsUrbanPoor 8.95 1.40 2.81 4.46 0.28 100.67 94.39 9.90Non-poor 6.43 0.75 1.59 3.85 0.24 67.01 60.78 15.09Overall 6.87 0.87 1.80 3.96 0.24 73.48 67.42 13.33RuralPoor 8.42 1.49 2.73 3.84 0.36 119.27 109.90 13.19Non-poor 6.31 0.85 1.75 3.40 0.31 85.59 76.47 17.71Overall 7.00 1.06 2.07 3.54 0.32 97.46 88.42 15.46OverallPoor 8.52 1.48 2.74 3.96 0.34 115.15 106.57 12.41Non-poor 6.34 0.82 1.70 3.55 0.28 78.87 70.99 16.47Overall 6.96 1.00 1.99 3.67 0.30 89.65 81.47 15.08Table 4 shows average household size and dependency ratio. The poor do tend to live in largerand younger households. They have larger Figure 22: Dependency ratio by povertyhousehold size than non-poor. Poor households status, 2001 Poor Non-poorcomprise, on average, 8.52 members whichcompare with mean of 6.34 for non-poor 78.87 Overall 115.15 85.59 Ruralindicating on average more than two extra 119.27 67.01 Urban 100.67persons in poor households relative to non-poor. 0 20 40 60 80 100 120 140Like household size, household composition also %differs by the status of poverty. This relationshipholds for both urban and rural areas. The key finding is that dependency is higher in poorhouseholds than non-poor. The total dependency ratio is defined as the number of members in1 It includes street vendors, porters, shoe cleaning, agricultural labourers, mining and construction labourers etc. 23
    • age group 0-14 and above/equal 65years to the number of members in age group 15-64 years.The ratio is expressed as percentage. The dependency ratio is about 115 percent for poorcompared to around 79 percent for non-poor. In urban areas dependency ratio is about 101percent for poor and 67 percent for non-poor whereas in rural areas it is 119 percent for poor andaround 86 for non-poor. The same holds for child dependency. The child dependency ratio isdefined as the number of members in age group 0-14 to the number of members in age group 15-64 years. The ratio is expressed as percentage.5.2 Ever attended schoolEver attended school is defined as the percentage of population aged 10 years and older thatattended school, expressed as a Figure 23: Percentage of population that has ever attended school by poverty status, 2001percentage of total population 10 80 73.98years and older. Ever attended rate 70 57.24 60 50.87is around 57 percent for non-poor 50 47.99 33.11 36.68 % 40and it decreases to about 37 percent 30 20for poor depicting a wide margin 10 0between them. In urban areas, this Urban Rural Overall Poor Non-poorrate is 74 percent for non-poor and51 percent for poor whereas in rural areas it is 48 percent and 33 percent respectively. In otherway it can be expressed that 63 percent of poor have never attended school against 43 percent ofnon-poor (Table 5).A large number of children leave school Figure 24: Left school before completing primarybefore completing primary education. level by poverty status, 2001The percentage of children aged 10-18years that left school before completing 30primary level is around 15 percent. The 20 % Overallrate depicts stark difference between poor 10 Ruraland non-poor. The percentage of children 0 Urban Poorthat left school before completing Non-poorprimary level is twice for poor (24 percent) compared to non-poor (12 percent). 24
    • Table 5: Education indicators by poverty status, 2001 Indicators Urban areas Rural areas Overall Non-poor Poor Non-poor Poor Non-poor PoorEver attended school 73.98 50.87 47.99 33.11 57.24 36.68Reasons for never attending schoolToo expensive - - - - 23.98 36.86Too far away - - - - 12.54 11.29Poor teaching/behaviour - - - - 00.88 00.78Had to help at home - - - - 04.72 02.55Had to help with work - - - - 02.96 02.63Parents/elders don’t approve - - - - 27.50 22.59No female staff - - - - 03.25 02.52Child sick/handicapped - - - - 03.79 02.47Child not willing - - - - 14.88 13.30Other - - - - 05.50 05.02 100.00 100.00Left school before completing 08.50 22.28 14.45 25.41 11.87 24.49primary levelReasons for leaving schoolbefore completing primary levelToo expensive - - - - 20.72 30.61Too far away - - - - 03.09 03.61Poor teaching/behaviour - - - - 02.16 03.28Had to help at home - - - - 05.44 04.40Had to help with work - - - - 05.05 04.01Parents/elders don’t approve - - - - 09.61 07.63No female staff - - - - 01.88 03.36Child sick/handicapped - - - - 04.91 03.59Child not willing - - - - 40.00 32.70Other 07.14 06.81 100.00 100.00GER (1-5 class) 100.77 64.97 77.92 51.84 84.68 54.12NET (1-5 class) 62.30 38.02 44.82 29.49 49.99 30.97GER (6-8 class) 71.23 36.07 40.16 20.21 50.25 23.25NET (6-8 class) 30.63 11.99 14.98 07.27 20.06 08.17GER (9-10 class) 74.91 29.67 42.96 15.15 54.37 18.45NET (9-10 class) 18.13 04.98 08.15 02.91 11.71 03.38Literacy level 69.87 42.29 41.30 26.83 51.46 29.93Highest class completedNever attended school 26.05 49.14 52.09 66.96 42.82 63.38Less than primary 11.46 15.37 13.17 12.85 12.56 13.35Primary 18.19 18.32 15.56 11.74 16.50 13.06Middle 13.56 08.15 08.06 04.16 10.02 04.96Secondary 14.96 06.28 06.91 02.98 09.77 03.65Higher secondary 07.18 01.89 02.27 00.79 04.02 01.01B.A, B.SC or higher 07.87 00.76 01.62 00.43 03.85 00.50Diploma/other 00.74 00.09 00.31 00.09 00.46 00.09Overall 100.00 100.00 100.00 100.00 100.00 100.00 25
    • There are also big gaps between them in urban and rural areas. Table 5 also shows the reasonsfor leaving school before completing primary level and never attending school in the past. It isclear from the table that accessibility to school is no problem for the poor. Only 3.61 percent ofthe poor cite school accessibility as a cause for leaving school and it is 11 percent in case ofnever attended school.In contrast, financial costs are more important as a reason both for leaving school and neverattended school particularly for the poor. Regarding to leaving school before completing primarylevel, 31 percent of poor report financial costs as a reason against 21 percent of non-poorwhereas in case of never attended school in the past, 37 percent of poor report financial cost as areason and it is 24 percent for non-poor. The other major reason reported by the poor and non-poor for never attending school is that parents/elders do not approve. Child not willing to go toschool is also an important reason particularly for leaving school. These two reasons could be theoutcome of poor school performance of poor children or perceived returns from extra schooling.Reasons of accessibility and costs point out, that increasing years of schooling for the poor don’trequire building more school but require reducing the opportunity cost of going to school.Attending school is costly for the poor because of direct costs or because it reduces the amountof time they can work at home. Raising household income of the poor and improving the qualityof education should be the goal of policy makers in order to reduce the gap of educationalattainment between poor and non-poor.5.3 Gross and net enrolment rateGross and net enrolment rate point out Figure 25: Gross enrolment rates by poverty status,wide gaps between poor and non-poor 2001and this relationship holds for urban and 200 Primary Middle Matricrural areas. Primary gross enrolment rate 150 % 100for poor is about 54 percent and 85 50percent for non-poor. This stark 0 Urban Urban Urban Rural Rural Rural Overall Overall Overalldifference is also present in urban andrural areas. Primary net enrolment rate is Poor Non-poor31 percent for poor compared to 50percent for non-poor (Table 5.). 26
    • Gross enrolment rate at the middle level for non-poor is twice as many as of poor and at matriclevel it is three times for non-poor compared to poor. Net enrolment rate at middle and matriclevel are also higher for non-poor than poor.5.4 Literacy rateLiteracy and schooling are important indicators of the quality of life, as well as being thedeterminants of the poor’s ability to take advantage of income-earning opportunities.Literacy is higher among non-poor than poor. PIHS 2001 suggest that there are wide differencesin literacy rate between poor and Figure 26: Literacy by poverty status, 2001non-poor. Literacy rate (age 10 69.87 80years or older who can read and 60 51.46 42.29 41.3write) is around 30 percent among % 40 26.83 29.93poor whereas it is 51 percent for 20 0non-poor. Literacy rate is higher Urban Rural Overallamong non-poor than poor both in Poor Non-poorurban and rural areas. Thedifference is about 28 percentage points in urban areas against 14.47 percentage points in ruralareas. It is higher in urban areas where there are more chances for literate to work (Table 5).5.5 Highest class completedThe table 5 presents the Figure 27: Higest class completed bypoverty status, 2001distribution of highest Non-poor Poorclass completed by 100%poverty status. 63 80%percent of the poor 60% 40%have never attended 20%school whereas it is 43 0% choo l ary ary iddle ndar y dary r lev el ther ed s prim d Prim pleted m Seco econ ighe ma/opercent approximately ttend than plete leted her s ted h Diplo ver a Less Com Com omp d hig mple Ne C plete Co Comfor non-poor depicting 27
    • a gap of 20 percentage points approximately. Rate of educational attainment is almost same forpoor and non-poor with respect to less than primary. As the level of educational attainmentincreases, so the difference in the rate between poor and non-poor rises sharply.Education is a key dimension of welfare. PIHS 2001 data indicate that there are markeddifferences within the population in the highest Figure 28: Average number of yeas ofeducational attainment among the population schooling by consumption decileaged 10 years and older ranked by per equivalent 8 7.3 7adult consumption expenditure. Individuals in Number of years 6 5.0 5 4.0lowest decile have on average 1.6 years of 4 3.0 3.3 3.7 3 2.6 2.1 2.2educational attainment whereas in top decile it is 2 1.6 17.3 years depicting a wide disparity between 0 1 2 3 4 5 6 7 8 9 10them. In other words the individual in top decile Consumption decilehave on average 4.6 times approximately asmany as years of education as individuals in lowest decile. This disparity points out to the reasonwhy there is large dispersion in wages of poor and non-poor. The key message is that investingin improving coverage and quality of education could be beneficial for the poor in improvingtheir earnings.HealthA few important indicators have been taken to view primary health by poverty status. Theseinclude immunisation, diarrhoea, pre and post natal care consultation.Table 6: Health indicators by poverty status, 2001 Indicators Urban areas Rural areas Overall Non-poor Poor Non-poor Poor Non-poor PoorFully immunized 76.56 53.72 51.50 40.39 59.82 42.60Diarrhoea 11.90 13.11 12.70 11.05 12.46 11.40Pre-natal consultation 71.19 41.32 30.61 19.29 43.23 23.04Choice of provider(pre-natal)Govt. hospital/clinic 39.95 48.28 40.67 45.52 40.30 46.36Private hospital/clinic 51.66 38.15 39.77 30.86 45.86 33.08Other 08.39 13.57 19.57 23.62 13.84 20.56Total 100.00 100.00 100.00 100.00 100.00 100.00Post-natal consultation 18.34 08.79 08.12 04.43 11.29 05.17Choice of provider(post-natal)Govt. hospital/clinic 22.34 44.21 27.32 40.79 24.34 42.07Private hospital/clinic 56.82 26.76 50.54 36.85 54.30 33.07Other 20.84 29.03 22.14 22.35 21.36 24.85Total 100.00 100.00 100.00 100.00 100.00 100.00 28
    • 5.6 ImmunisationChild immunisation rates are still substantially low. The percentage of children aged 12-23months “fully immunized” based on recall or record is 43 percent for poor whereas it is 60percent for non-poor indicating a Figure 29: Percentage of children aged 12-23 months that have been fully immunised by poverty status, 2001wide difference of 17 percentageof points. The difference of Overall 59.82 42.60immunistation between poor and Rural 40.39 51.50non-poor is sharper in urban Urban 76.56 53.72areas than rural areas. In urban 0 20 40 60 80 100areas 77 percent children of non- Poor Non-poor %poor are immunised against 54 percent of poor while in rural areas this rate is 52 percent and 40percent for non-poor and poor respectively. In case of diarrhoea the rates are almost same forpoor and non-poor and this holds also for urban and rural areas (Table 6.).5.7 Maternal health careMaternal mortality rate is high in Pakistan though it has decreased from 550 per 100,000 livebirths in 1990-91 to 350 in 2000-01. There is no visible improvement in reproductive healthservices; especially pre-natal and post-natal care consultation. Table 6 indicates that 35 percentof women, who had given birth in the last Figure 30: Pre and post natal carethree years, went for pre-natal care lt ti poverty status, b 2001 Urba Rural Overalconsultation during their last pregnancy.The attendance is lower for poor than 150non-poor. About 23 percent poor women 100went for pre-natal consultation compared % 50to 43 percent for non-poor. There are alsowide differences in urban and rural areas. 0 Poor Non-poor Poor Non-poorPoor women mostly attend government Pre-natal care consultation Post-natal care consultationhospitals/clinics both in urban and ruralareas in contrast to non-poor who prefer to go to private hospitals/clinics.The rate of post-natal care consultation is lower than pre-natal care consultation. It is about 9percent. Only 5 percent poor women visited for post natal care consultation and this rate is 11 29
    • percent for non-poor. Poor prefer government facilities while non-poor visit privatehospitals/clinics (Table 6).5.8 Housing conditionsTable 7: Housing condition by poverty status, 2001 Indicators Urban areas Rural areas Overall Non-poor Poor Non-poor Poor Non-poor PoorElectricity 98.84 91.92 74.45 63.34 82.80 68.80Gas 70.17 42.58 04.80 03.32 27.16 10.82Telephone (land line) 32.23 05.24 08.84 01.82 16.84 02.47Source of drinking waterPiped water 61.86 43.94 11.56 9.90 28.77 16.41Hand pump 09.97 28.11 51.12 59.85 37.04 53.79Motorised pumping/tube well 23.73 21.81 19.05 08.27 20.65 10.86Well 01.35 03.22 08.62 11.69 06.13 10.07Other 03.08 02.93 09.64 10.29 07.40 08.88Total 100.00 100.00 100.00 100.00 100.00 100.00Type of toiletFlush contd.to public sewerage 57.26 30.36 01.50 00.57 20.57 06.27Flush connected to pit 21.66 21.84 26.67 10.77 24.96 12.89Flush contd. To open drain 14.43 23.25 06.22 04.65 09.03 08.21Dry raised/pit latrine 04.01 12.73 16.08 19.41 11.96 18.13No toilet in the house 02.65 11.82 49.52 64.60 33.49 54.50Total 100.00 100.00 100.00 100.00 100.00 100.00Housing conditions for the poor are also generally worse than for the rest of the population. Thisholds in rural and urban areas. Figure 31: Access to facilites (electricity, gas and telephone) ,by poverty status,2001The poor are disadvantaged inaccess to safe sources of water 200 Electricity Gas 150supply and sanitation. About Telephone % 10016 percent of poor population 50 0has access to piped water for Urban Overall Urban Overall Urban Overalldrinking compared to 29 Poor Non-poorpercent for non-poor. Even inurban areas 56 percent of poor population does not have access to piped water for drinking.Similarly, only 27 percent of the poor live in houses having flush toilet compared to around 55percent of non-poor. In rural areas about 65 percent of poor household don’t have toilet in thehouse. Poor access to drinking water supply and sanitation in turn makes it more likely that thepoor suffer from worse health than non-poor. Access to services and amenities such as 30
    • electricity, gas and telephone is much lower among the poor than non-poor as well as amongrural residents compared to those in urban areas (Table 7).5.9 Percentage of income shares by poverty statusTable 8: Main source of income by poverty status, 2001 Source Non-poor Poor Overall Wages and salaries 40.15 48.70 43.09 Pension 00.89 00.35 00.71 Crop 17.31 16.97 17.20 Livestock 07.01 07.10 07.04 Non-agriculture activities 20.15 17.00 19.07 Property 02.03 00.73 01.58 Gift and assistance 01.67 01.16 01.50 Foreign remittances 03.29 00.93 02.48 Domestic remittances 06.12 05.21 05.80 Other 01.38 01.85 01.54 Total 100.00 100.00 100.00Table 8 presents income shares of different sources by poverty status. These data are usuallysubject to underestimation, which is a common characteristic of household surveys. Wages andsalaries contribute approximately 43 percent to total income and its share to the income of thepoor is around 49 percent as compared to 40 percent for non-poor. It is evident from the tablethat sources of income i.e. non-agriculture activities, foreign remittances and property are moreimportant for non-poor than poor. However, there is not much difference between poor and non-poor in shares of income regarding crop, livestock and domestic remittances.5.10 Durable goodsTable 9 depicts distribution of durable goods owned by households. The distribution indicatesremarkable differences in the living standards of poor and non-poor. Not to speak of luxuriousgoods such as refrigerator, air conditioner, gyser and motor car, there are sharp differences evenin the ownership of those goods that are considered necessity. Only 10 percent of poorhouseholds own washing machines as compared to 33 percent for non-poor. Similarly, 16percent of poor household have T.V set against 38 percent for non-poor. The percentage of poorhouseholds that owns refrigerator is 4 percent and rising to 22 percent for non-poor. 31
    • Table 9: Percentage of households with durable items by poverty status, 2001 Durable items Non-poor Poor Overall Refrigerator 22.28 03.87 17.09 Freezer 04.92 00.78 03.76 Air conditioner 02.14 00.01 01.54 Air cooler 06.81 00.88 05.14 Fan (ceiling/table) 78.53 63.29 74.24 Gyser (gas/electric) 05.09 00.33 03.75 Washing machine/dryer 33.03 09.45 26.39 Camera (still/movie) 03.04 00.40 02.30 Cooking stove 26.41 08.46 21.35 Cooking range 01.46 00.02 01.05 Heater 04.57 00.55 03.44 Bicycle 34.99 31.47 34.00 Car/vehicle 03.16 00.16 02.32 Motor cycle 09.55 01.49 07.28 TV 38.26 16.13 32.03 VCR, VCP, Receiver De-coder 03.28 00.37 02.46 Radio, Tape recorder 28.65 18.51 25.79 CD player 00.54 00.01 00.39 Vacuum cleaner 00.49 00.08 00.38 Sewing/knitting machine 50.78 34.22 46.12 Personal computer 01.09 00.04 00.796 ConclusionPoverty profile is important from policy point of view. It broadens and deepens ourunderstanding about the dimensions of poverty. It is also useful for measuring the degree towhich the government has been successful in reducing the poverty over time.Poverty measures have increased over time. The incidence of poverty at national level was about25 percent in 1992-93 which increased significantly overtime to around 34 percentapproximately in 2001 indicating a rise of 9 percentage points. During the last two years i.e.1998-99 & 2000-01, poverty increased by 11 percent mainly due to drought. Similarly, povertygap and severity of poverty have increased over time. However, during the last two surveys headcount ratios have increased sharply than poverty gap and severity of poverty. It reveals that asubstantial proportion of the poor people lie close to the poverty line and they are most likely tocross it in the presence of better performance of the economy. The factors responsible for theincrease in poverty during the 1990s include: low GDP growth rate, public finance crisis,problem of external finance, decrease in formal employment opportunities due to privatisation of 32
    • government owned enterprises and downsizing in the public sector, cut in subsidies and sharprise in utilities rates.Rural areas more poor than urban areas and rural poverty has increased faster than urban poverty.Urban poverty was about 20 percent in 1992-93 and it has risen to 23 percent approximatelydepicting marginal increase of 3 percentage points over this point. On the other side, rural areasshow a rise of around 12 percentage points in head count ratio form 27.63 percent in 1992-93 to39.26 percent in 2000-01. Moreover, rural areas are the habitat of the most of the poor people. 81percent of the total poor are concentrated in rural areas while the share of rural areas in totalpopulation is around 71 percent. This situation suggests that rural areas should be the focus ofpoverty reduction strategies. Earning of the rural poor can be enhanced by improving agriculturesector performance that is the mainstay of the rural population. The policy agenda may involveimprovement in access to land, agricultural productivity, price incentives and creditarrangements. There is also a critical need for major improvement in rural infrastructure. Publicpolicy may also improve opportunities in the labour-intensive non-formal sector.Poverty analysis by household characteristics provides us useful information. It shows thatpoverty increases as the household size rises and this rise is monotonous. Household with accessto electricity, gas, telephone, piped drinking water and flush toilet have lower poverty rates thanthose without these facilities and there are wide variations between urban and rural areas. Levelof educational attainment is important in explaining poverty. There is an inverse relationshipbetween education level of the household head and poverty. The higher educated are more likelyto have greater incomes and have lower chances to fall in poverty. Poverty is common inagriculture and construction sector and among paid employees and those who are engaged inelementary occupations.Furthermore, the characteristics of the poor point out that they have lower gross and netenrolment rates than non-poor. Same is the situation for health indicators.There are three policy messages with respect to education. First, literacy rates may be improved.Second, policy makers should find ways and means to increase enrolment rates and reducedropout rates. Third, simply an increase in enrolment rate will not be sufficient to reducepoverty. Level of educational attainment must be improved at least to middle level in order toreduce poverty significantly. 33
    • Though health indicators have improved overt time but still they are low particularly for poorpeople. This situation demands public policy to focus particularly in rural areas on raising healthexpenditure and aiming on prevention and control programmes, especially in the area ofreproductive health, child health, nutrition deficiencies and communicable and infectiousdiseases.To conclude, poverty at national level has increased over time. Rural poverty has risen markedlywhile urban poverty has remained stable more or less. Rural areas should stand at the top inpoverty reduction strategies. Moreover, this poverty profile may be helpful for the reallocation ofcrucial social spending on education, health, and social protection, to ensure a more effective useof public resources in helping the poorest people. 34
    • Appendix A: Confidence intervals for poverty measures by region and periodPoverty measures by Estimate Standard 95 % confidence intervals Year Error Minimum MaximumYear=1993Headcount 25.46 01.03 23.45 27.48Urban 19.99 01.11 17.80 22.17Rural 27.63 01.41 24.87 30.40Poverty gap 04.27 00.21 03.9 04.70Urban 03.43 00.24 02.96 03.90Rural 04.60 00.28 04.05 05.16Severity of poverty 01.10 00.06 00.97 01.22Urban 00.89 00.08 00.74 01.04Rural 01.18 00.09 01.01 01.35Year =1994Headcount 28.17 00.82 26.56 29.79Urban 15.39 01.08 13.27 17.51Rural 33.54 01.02 31.53 35.54Poverty gap 05.22 00.21 04.80 05.63Urban 02.74 00.23 02.29 03.19Rural 06.25 00.27 05.72 06.79Severity of poverty 01.44 00.09 01.28 01.62Urban 00.69 00.07 00.56 00.82Rural 01.76 00.12 01.53 01.99Year =1997Headcount 25.78 00.87 24.08 27.48Urban 15.84 01.08 13.72 17.96Rural 30.17 01.10 28.02 32.33Poverty gap 04.38 00.20 03.99 04.77Urban 02.41 00.22 01.99 02.84Rural 05.25 00.26 04.75 05.76Severity of poverty 01.14 00.06 01.01 01.27Urban 00.59 00.07 00.47 00.73Rural 01.39 00.09 01.21 01.56Year =1999Headcount 31.08 00.83 29.45 32.71Urban 21.37 01.09 19.24 23.49Rural 35.13 01.07 33.03 37.22Poverty gap 06.58 00.26 06.06 07.10Urban 04.27 00.28 03.72 04.81Rural 07.55 00.35 06.86 08.23Severity of poverty 02.06 00.12 01.83 02.29Urban 01.29 00.11 01.08 01.50Rural 02.38 00.16 02.07 02.69Year =2001Headcount 34.46 00.84 32.82 36.10Urban 22.69 01.11 20.50 24.87Rural 39.26 01.06 37.18 41.33Poverty gap 07.03 00.25 06.54 07.52Urban 04.55 00.30 03.96 05.14Rural 08.04 00.33 07.40 08.68Severity of poverty 02.13 00.10 01.93 02.33Urban 01.35 00.12 01.11 01.59Rural 02.44 00.13 02.18 02.71 35
    • Appendix B: Confidence intervals for poverty measures by province and region, 2001 Province and Estimate Standard 95 % confidence intervals region error Minimum MaximumPunjabHeadcount 32.24 01.03 30.22 34.27Urban areas 23.33 01.51 20.38 26.29Rural areas 35.86 01.30 33.30 38.41Poverty gap 06.83 00.31 06.22 07.43Urban areas 05.23 00.43 04.39 06.07Rural areas 07.48 00.40 06.70 08.26Severity of poverty 02.15 00.13 01.89 02.41Urban areas 01.68 00.19 01.31 02.05Rural areas 02.34 00.17 02.01 02.68SindhHeadcount 35.32 01.40 32.55 38.08Urban areas 20.06 01.66 16.79 23.32Rural areas 45.07 02.02 41.11 49.04Poverty gap 07.41 00.48 06.47 08.35Urban areas 03.32 00.41 02.50 04.13Rural areas 10.03 00.73 08.60 11.45Severity of Poverty 02.27 00.20 01.88 02.67Urban 00.84 00.15 00.55 01.13Rural 03.19 00.32 02.57 03.80NWFPHeadcount 41.47 01.72 39.09 44.85Urban areas 29.05 02.93 23.30 34.81Rural areas 43.61 01.95 39.77 47.44Poverty gap 07.47 00.44 06.60 08.34Urban areas 05.22 00.61 04.02 06.42Rural areas 07.86 00.51 06.86 08.86Severity of Poverty 01.98 00.16 01.66 02.30Urban areas 01.35 00.20 00.97 01.74Rural areas 02.09 00.19 01.72 02.46BalochistanHeadcount 35.49 02.52 30.54 40.43Urban areas 26.18 02.96 20.37 31.99Rural areas 37.45 02.99 31.57 43.33Poverty gap 06.03 00.55 04.95 07.11Urban areas 04.52 00.65 03.26 05.80Rural areas 06.35 00.65 05.06 07.62Severity of Poverty 01.46 00.16 01.14 01.77Urban areas 01.14 00.21 00.72 01.56Rural areas 01.53 00.19 01.16 01.90 36
    • Appendix C: Hypothesis testing Hypothesis Coefficien Standard t P>|t| 95 % confidence t error intervals Minimum MaximumHead count: hypothesis testing by year- [poor]1993 + [poor]1994 = 0 .0271375 .0132593 2.05 0.041 .00114 .0531349- [poor]1993 + [poor]1997 = 0 .0031582 .0135172 0.23 0.815 .0233449 .0296613- [poor]1993 + [poor]1999 = 0 .0562045 .0132283 4.25 0.000 .0302679 .0821411- [poor]1993 + [poor]2001 = 0 .0899736 .0133218 6.75 0.000 .0638536 .1160936- [poor]1994 + [poor]1997 = 0 .0239793 .0119575 2.01 0.045 .0474243 .0005342- [poor]1994 + [poor]1999 = 0 .029067 .0117748 2.47 0.014 .0059802 .0521539- [poor]1994 + [poor]2001 = 0 .0628361 .0117517 5.35 0.000 .0397947 .0858776- [poor]1997 + [poor]1999 = 0 .0530463 .0123172 4.31 0.000 .0288959 .0771966- [poor]1997 + [poor]2001 = 0 .0868154 .0123657 7.02 0.000 .0625699 .1110609- [poor]1999 + [poor]2001 = 0 .0337691 .011105 3.04 0.002 .0119956 .0555426Head count: hypothesis testing by region- [poor]U93 + [poor]R93 = 0 .0764302 .0179841 4.25 0.000 .0411688 .1116915- [poor]U94 + [poor]R94 = 0 .1814134 .0148821 12.19 0.000 .1522341 .2105927- [poor]U97 + [poor]R97 = 0 .1433658 .0154324 9.29 0.000 .1131075 .1736241- [poor]U99 + [poor]R99 = 0 .1375982 .0152162 9.04 0.000 .1077637 .1674326- [poor]U01 + [poor]R01 = 0 .1657162 .0153738 10.78 0.000 .1355729 .1958596Head count: hypothesis testing by region and province, 2001- [poor]RP + [poor]RS = 0 .092175 .02404 3.83 0.000 .0449942 .1393558- [poor]RP + [poor]RN = 0 .0775014 .0234814 3.30 0.001 .0314169 .1235859- [poor]RP + [poor]RB = 0 .0159768 .0326753 0.49 0.625 .0481516 .0801051- [poor]RS + [poor]RN = 0 .0146736 .0281061 0.52 0.602 .0698345 .0404873- [poor]RS + [poor]RB = 0 .0761982 .0361421 2.11 0.035 .1471306 .0052659- [poor]RN + [poor]RB = 0 -.0615246 .035773 -1.72 0.086 -.131732 .0086832- [poor]UP + [poor]US = 0 .0327721 .0224319 1.46 0.144 .0767969 .0112527- [poor]UP + [poor]UN = 0 .0571657 .0329684 1.73 0.083 .0075379 .1218692- [poor]UP + [poor]UB = 0 .0284831 .0332398 0.86 0.392 .0367532 .0937193- [poor]US + [poor]UN = 0 .0899378 .033705 2.67 0.008 .0237886 .156087- [poor]US + [poor]UB = 0 .0612552 .0339705 1.80 0.072 .0054152 .1279255- [poor]UN + [poor]UB = 0 .0286826 .0416859 0.69 0.492 .1104952 .05313Head count: hypothesis testing by province, 2001- [poor]P + [poor]S = 0 .0307392 .0174492 1.76 0.078 .0035065 .0649848- [poor]P + [poor]N = 0 .0923199 .0200709 4.60 0.000 .0529289 .1317109- [poor]P + [poor]B = 0 .0324758 .0272392 1.19 0.233 .0209836 .0859352- [poor]S + [poor]N = 0 .0615807 .022246 2.77 0.006 .0179208 .1052407- [poor]S + [poor]B = 0 .0017366 .0288794 0.06 0.952 .0549419 .0584151- [poor]N + [poor]B = 0 -.0598441 .030535 -1.96 0.050 -.119772 .0000836Head count: hypothesis testing by province and region between 1999 and 2001- [poor]UP99 + [poor]UP01 = 0 .009094 .0219978 0.41 0.679 .0522608 .0340728- [poor]US99 + [poor]US01 = 0 .0448696 .0244238 1.84 0.066 .0030579 .092797- [poor]UN99 + [poor]UN01 = 0 .0192299 .0388287 0.50 0.621 -.056965 .0954244- [poor]UB99 + [poor]UB01 = 0 .0324035 .0390758 0.83 0.407 -.04428 .109083- [poor]RP99 + [poor]RP01 = 0 .0124013 .0195607 0.63 0.526 -.025983 .0507857- [poor]RS99 + [poor]RS01 = 0 .1107522 .0261984 4.23 0.000 .0593424 .1621621- [poor]RN99 + [poor]RN01 = 0 -.0011568 .0316993 -0.04 0.971 -.063361 .0610476- [poor]RB99 + [poor]RB01 = 0 .1610878 .0415652 3.88 0.000 .0795234 .2426523Head count: hypothesis testing by province between 1999 and 2001- [poor]P99 + [poor]P01 = 0 .0061848 .0152783 0.40 0.686 -.023796 .0361658- [poor]S99 + [poor]S01 = 0 .0931168 .0188098 4.95 0.000 .0562059 .1300278- [poor]N99 + [poor]N01 = 0 .0019421 .0281781 0.07 0.945 -.053353 .0572366- [poor]B99 + [poor]B01 = 0 .1394012 .0359759 3.87 0.000 .0688048 .2099976Poverty gap: hypothesis testing by year- [povgap]93 + [povgap]94 = 0 .0094655 .002992 3.16 0.002 .003599 .0153319- [povgap]93 + [povgap]97 = 0 .0011367 .0028674 0.40 0.692 .0044854 .0067587- [povgap]93 + [povgap]99 = 0 .0231274 .0033253 6.95 0.000 .0166074 .0296473- [povgap]93 + [povgap]01 = 0 .0276057 .0033133 8.33 0.000 .0211093 .034102- [povgap]94 + [povgap]97 = 0 .0083288 .0028855 2.89 0.004 .0139864 .0026711- [povgap]94 + [povgap]99 = 0 .0136619 .0033727 4.05 0.000 .007049 .0202748- [povgap]94 + [povgap]01 = 0 .0181402 .0032594 5.57 0.000 .0117495 .0245309- [povgap]97 + [povgap]99 = 0 .0219907 .003382 6.50 0.000 .0153595 .0286218- [povgap]97 + [povgap]01 = 0 .026469 .0032323 8.19 0.000 .0201314 .0328066- [povgap]99 + [povgap]01 = 0 .0044783 .0033623 1.33 0.183 .0021142 .0110708Poverty gap: hypothesis testing by region- [povgap]U93 + [povgap]R93 = 0 .0116797 .0037033 3.15 0.002 .0044187 .0189407 37
    • Hypothesis Coefficien Standard t P>|t| 95 % confidence t error interval Minimum Maximum- [povgap]U94 + [povgap]R94 = 0 .0351582 .0035855 9.81 0.000 .0281282 .0421883- [povgap]U97 + [povgap]R97 = 0 .0284023 .0033784 8.41 0.000 .0217784 .0350263- [povgap]U99 + [povgap]R99 = 0 .0327705 .0044719 7.33 0.000 .0240025 .0415385- [povgap]U01 + [povgap]R01 = 0 .0348904 .0044348 7.87 0.000 .0261951 .0435858Poverty gap: hypothesis testing by province and region, 2001- [povgap]RP + [povgap]RS = 0 .0254933 .0082688 3.08 0.002 .009265 .0417217- [povgap]RP + [povgap]RN = 0 .003798 .0064566 0.59 0.557 -.008874 .0164696- [povgap]RP + [povgap]RB = 0 -.0113029 .0076415 -1.48 0.139 -.026300 .0036944- [povgap]RS + [povgap]RN = 0 -.0216953 .0088673 -2.45 0.015 -.039098 -.0042923- [povgap]RS + [povgap]RB = 0 .0367962 .009764 3.77 0.000 .0559589 .0176334- [povgap]RN + [povgap]RB = 0 -.0151008 .0082855 -1.82 0.069 -.031362 .0011603- [povgap]UP + [povgap]US = 0 -.0190836 .0059665 -3.20 0.001 -.030794 -.0073736- [povgap]UP + [povgap]UN = 0 -.0000704 .0074546 -0.01 0.992 -.014701 .0145601- [povgap]UP + [povgap]UB = 0 -.0069891 .0077536 -0.90 0.368 -.022206 .0082281- [povgap]US + [povgap]UN = 0 .0190132 .0073752 2.58 0.010 .0045387 .0334877- [povgap]US + [povgap]UB = 0 .0120945 .0076772 1.58 0.116 -.002973 .0271618- [povgap]UN + [povgap]UB = 0 -.0069187 .0088832 -0.78 0.436 -.024353 .0105155Poverty gap: hypothesis testing by province, 2001- [povgap]P + [povgap]S = 0 .0058258 .0056955 1.02 0.307 .0053521 .0170038- [povgap]P + [povgap]N = 0 .0064286 .0054003 1.19 0.234 .0041701 .0170272- [povgap]P + [povgap]B = 0 -.0079789 .0063094 -1.26 0.206 -.020362 .0044038- [povgap]S + [povgap]N = 0 .0006027 .0065234 0.09 0.926 -.012200 .0134055- [povgap]S + [povgap]B = 0 -.0138047 .0072938 -1.89 0.059 -.028120 .00051- [povgap]N + [povgap]B = 0 -.0144075 .0070657 -2.04 0.042 -.028275 -.0005403Poverty gap: hypothesis testing by province and region between 1999 and 2001- [povgap]UP99 + [povgap]up01 = 0 .001831 .0061095 0.30 0.764 -.01016 .0138198- [povgap]US99 + [povgap]US01 = 0 .0052619 .0057017 0.92 0.356 -.005927 .0164504- [povgap]UN99 + [povgap]UN01 = 0 -.0043775 .0087761 -0.50 0.618 -.021599 .0128441- [povgap]UB99 + [povgap]UB01 = 0 .005785 .009051 0.64 0.523 -.011976 .0235461- [povgap]RP99 + [povgap]RP01 = 0 -.0004889 .00552 -0.09 0.929 -.011321 .0103431- [povgap]RS99 + [povgap]RS01 = 0 .0275776 .0084967 3.25 0.001 .0109043 .0442509- [povgap]RN99 + [povgap]RN01 = 0 -.0161635 .0128282 -1.26 0.208 -.041337 .0090096- [povgap]RB99 + [povgap]RB01 = 0 .025822 .0092764 2.78 0.005 .0076188 .0440253Poverty gap: hypothesis testing by province between 1999 and 2001- [povgap]P99 + [povgap]P01 = 0 .0001769 .0042994 0.04 0.967 -.00826 .0086137- [povgap]S99 + [povgap]S01 = 0 .0208317 .0056687 3.67 0.000 .009708 .0319555- [povgap]N99 + [povgap]N01 = 0 -.0144118 .0111446 -1.29 0.196 -.036281 .0074575- [povgap]B99 + [povgap]B01 = 0 .0224167 .0080293 2.79 0.005 .0066606 .0381727Severity of poverty: hypothesis testing by year- [sevpov]93 + [sevpov]94 = 0 .0035149 .001087 3.23 0.001 .0013836 .0056462- [sevpov]93 + [sevpov]97 = 0 .0004464 .0009123 0.49 0.625 .0013423 .0022351- [sevpov]93 + [sevpov]99 = 0 .009641 .001321 7.30 0.000 .007051 .012231- [sevpov]93 + [sevpov]01 = 0 .0103107 .0012347 8.35 0.000 .0078897 .0127316- [sevpov]94 + [sevpov]97 = 0 .0030684 .0010908 2.81 0.005 .0052072 .0009296- [sevpov]94 + [sevpov]99 = 0 .0061261 .0014435 4.24 0.000 .0032959 .0089564- [sevpov]94 + [sevpov]01 = 0 .0067958 .001337 5.08 0.000 .0041744 .0094173- [sevpov]97 + [sevpov]99 = 0 .0091946 .0013684 6.72 0.000 .0065116 .0118775- [sevpov]97 + [sevpov]01 = 0 .0098642 .0012322 8.01 0.000 .0074484 .0122801- [sevpov]99 + [sevpov]01 = 0 .0006697 .0014528 0.46 0.645 .0021789 .0035182Severity of poverty: hypothesis testing by region- [sevpov]U93 + [sevpov]R93 = 0 .002892 .0011542 2.51 0.012 .000629 .005155- [sevpov]U94 + [sevpov]R94 = 0 .0106893 .0013527 7.90 0.000 .0080371 .0133415- [sevpov]U97 + [sevpov]R97 = 0 .0078663 .0011168 7.04 0.000 .0056767 .010056- [sevpov]U99 + [sevpov]R99 = 0 .0109319 .0019112 5.72 0.000 .0071847 .0146791- [sevpov]U01 + [sevpov]R01 = 0 .0109169 .0018194 6.00 0.000 .0073497 .0144842Severity of poverty: hypothesis testing by province and region, 2001- [sevpov]RP + [sevpov]RS = 0 .0084486 .0035658 2.37 0.018 .0014503 .0154469- [sevpov]RP + [sevpov]RN = 0 -.0025157 -.002516 -0.99 0.322 -.007502 .0024708- [sevpov]RP + [sevpov]RB = 0 -.0081578 .0025336 -3.22 0.001 -.013130 -.0031853- [sevpov]RS + [sevpov]RN = 0 -.0109643 .0036539 -3.00 0.003 -.018135 -.0037932- [sevpov]RS + [sevpov]RB = 0 -.0166064 .003649 -4.55 0.000 -.023768 -.0094449- [sevpov]RN + [sevpov]RB = 0 -.0056421 .0026561 -2.12 0.034 -.010855 -.0004292- [sevpov]UP + [sevpov]US = 0 -.0084212 .002378 -3.54 0.000 -.013088 -.0037542- [sevpov]UP + [sevpov]UN = 0 -.0032635 .0027089 -1.20 0.229 -.00858 .002053 38
    • Hypothesis Coefficie Standard t P>|t| 95 % confidence nt error interval Minimum Maximum- [sevpov]UP + [sevpov]UB = 0 -.0053889 .0028362 -1.90 0.058 -.010955 .0001774- [sevpov]US + [sevpov]UN = 0 .0051577 .0024513 2.10 0.036 .0003469 .0099685- [sevpov]US + [sevpov]UB = 0 .0030324 .0025912 1.17 0.242 -.002053 .0081179- [sevpov]UN + [sevpov]UB = 0 -.0021253 .0028979 -0.73 0.463 -.007813 .003562Severity of poverty: hypothesis testing by province, 2001- [sevpov]P + [sevpov]S = 0 .0011959 .0024169 0.49 0.621 -.003547 .0059394- [sevpov]P + [sevpov]N = 0 -.0016819 .0021023 -0.80 0.424 -.005808 .0024441- [sevpov]P + [sevpov]B = 0 -.0069164 .0020713 -3.34 0.001 -.010982 -.0028513- [sevpov]S + [sevpov]N = 0 -.0028778 .0025947 -1.11 0.268 -.007970 .0022145- [sevpov]S + -.0081124 .0025696 -3.16 0.002 -.013156 -.0030692 [sevpov]B = 0- [sevpov]N + [sevpov]B = 0 -.0052346 .0022762 -2.30 0.022 -.009702 -.0007673Severity of poverty: hypothesis testing by province and region between 1999 and 2001- [sevpov]UP99 + [sevpov]UP01 = 0 .001024 .0025919 0.40 0.693 -.004062 .00611- [sevpov]US99 + [sevpov]US01 = 0 .0010307 .0018935 0.54 0.586 -.002685 .0047464- [sevpov]UN99 + [sevpov]UN01 = 0 -.0053419 .0036047 -1.48 0.139 -.012416 .0017316- [sevpov]UB99 + [sevpov]UB01 = 0 .0010785 .0030537 0.35 0.724 -.004914 .0070709- [sevpov]RP99 + [sevpov]RP01 = 0 -.000448 .002304 -0.19 0.846 -.004969 .0040733- [sevpov]RS99 + [sevpov]RS01 = 0 .0085436 .0036941 2.31 0.021 .0012946 .0157926- [sevpov]RN99 + [sevpov]RN01 = 0 -.00884 .006361 -1.39 0.165 -.021322 .0036424Severity of poverty: hypothesis testing by province between 1999 and 2001- [sevpov]P99 + [sevpov]P01 = 0 -.000025 .0017992 -0.01 0.989 -.003555 .0035061- [sevpov]S99 + [sevpov]S01 = 0 .006313 .0023602 2.67 0.008 .0016815 .0109445- [sevpov]N99 + [sevpov]N01 = 0 -.008320 .0054831 -1.52 0.129 -.019080 .0024392- [sevpov]B99 + [sevpov]B01 = 0 .0043608 .0025942 1.68 0.093 -.000730 .0094514U: urban, R: rural, P: Punjab, S: Sindh, N: NWFP, B: Balochistan 39
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