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Incidence of Poverty in Pakistan: Methods and Measurement Fowad Murtaza Department of Economics University of Essex IDEAs Workshop/Conference at Tsinghua University, Beijing, China, June 3-9, 2007. Presentation Contents. 1. Motivation Methodology 3. Results and Future work. 1. Motivation.

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  1. Incidence of Poverty in Pakistan: Methods and MeasurementFowad MurtazaDepartment of EconomicsUniversity of EssexIDEAs Workshop/Conference at Tsinghua University, Beijing, China, June 3-9, 2007 Incidence of Poverty in Pakistan: Methods and Measurement

  2. Presentation Contents 1. Motivation • Methodology 3. Results and Future work Incidence of Poverty in Pakistan: Methods and Measurement

  3. 1. Motivation • In the absence of an official and widely acceptable poverty line in Pakistan, the motivation is to review different poverty measurement approaches and indicators; and respectively develop the indices of poverty and conduct poverty analyses in Pakistan. Incidence of Poverty in Pakistan: Methods and Measurement

  4. 2. Methodology The methodology for the poverty analysis is divided into 6 steps: • data source • indicator of well being • unit of analysis • selection and calculation of poverty line • poverty indexes • checking the robustness Incidence of Poverty in Pakistan: Methods and Measurement

  5. 2.1 Data Source Household Integrated Economic Survey (HIES) data conducted by the Federal Bureau of Statistics, Government of Pakistan for year (2000-01) 2.2 Indicator of Wellbeing Monetary indicator; i.e. consumption expenditure of households 5 sub consumption aggregates: • food items • fuel and utilities • housing • frequent non food expenses • other non food expenses Incidence of Poverty in Pakistan: Methods and Measurement

  6. 2.3Unit of Analysis Individuals not households i.e consumption per capita 2.4Selection and calculation of Poverty Line • Absolute Poverty Line • Food Energy Intake (FEI)/Caloric Approach (a monetary expenditure necessary to reach the minimum calorie intake, and it also includes a minimum expenditure of non-food items) Incidence of Poverty in Pakistan: Methods and Measurement

  7. 2.4 (cont..) At least three steps required in adopting the calorie approach: • minimum calorie intake per day(2350 calories per adult per day set by Government of Pakistan); • transformation of the calorie intake in monetary terms (regression); • inclusion of other non food minimum expenditure in relation to the minimum food expenditure. Incidence of Poverty in Pakistan: Methods and Measurement

  8. 2.5 Poverty Index Most common and preferred measure: Headcount Ratio (Incidence of Poverty) • Head-count: Where z is the poverty line, wi is the per adult equivalent consumption expenditure of the individual i, and N is the total population Incidence of Poverty in Pakistan: Methods and Measurement

  9. Poverty Line = Rs728.51 per capita per month Incidence of Poverty in Pakistan: Methods and Measurement

  10. Relative Poverty Incidence: Incidence of Poverty in Pakistan: Methods and Measurement

  11. 2.6 Checking the Robustness of Poverty Indices • For robustness analysis for different poverty lines, I sketch cumulative distribution functions. Incidence of Poverty in Pakistan: Methods and Measurement

  12. Robustness Check of Estimated Poverty Line Incidence of Poverty in Pakistan: Methods and Measurement

  13. Food Deficient Population = 69.69% (i.e. population using less than 2350 calories daily) Incidence of Poverty in Pakistan: Methods and Measurement

  14. Further work... • Inclusion of more data sets • Develop poverty profiles and correlates • Analyze the determinants of poverty • Inequality and income distribution • Sectoral poverty decomposition • Growth and poverty reduction etc • Government policies and poverty alleviation (MDGs) Incidence of Poverty in Pakistan: Methods and Measurement

  15. Thank YOU! Incidence of Poverty in Pakistan: Methods and Measurement

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