Relative poverty in Pakistan: an estimation from the Household Income and Expenditure Survey (1984-85)

This study, operationalising the concept of relative poverty for Pakistan, fixes the poverty line at 75% of the national average equivalent expendi- tures. A single poverty line is taken for all the four provinces of Pakistan. The microdata of the Household Income and Expenditure Survey of the year 1984-85 are used. The findings are that almost 39% of the total number of households in Pakistan are poor. The province of Baluchistan has the highest poverty incidence (45.3%) whereas Punjab contains the most number of poor (more than 60%). Sind is the least poor province. The households classified as agricultural, animal husbandry, forestry and production workers, tran- sport operators and labourers are relatively more poor. Furthermore, the large households, the households whose heads have attained primary or less. education and the households whose heads are active in the mining, manu- facturing and construction sectors are also identified as high poverty groups. The first modification to the definition of poverty is analyzed by using income instead of expenditures as a measure of household resources. This results in a 4% higher poverty for the country as a whole. Punjab is now considered the poorest of all provinces. The second modification is to use 50% of the average as the poverty line. The result is that now only 15% of the households is poor. In this definition of the poverty line, the poverty incidence is lower for income-based poverty line: only 11%. Notably, in all definitions of poverty, the high poverty groups remain the same. An impor- tant limitation of this study is the use of a steeper equivalence scale, i.e. the OECD equivalence scale. Some extensions of the study are in preparation to compute the group-specific poverty based on cross-classification of house- holds and by using only one or both income- and expenditure-based poverty lines.