Poverty, Income Inequality, and Growth in Pakistan: A Pooled Regression Analysis
AbstractThis study estimates a set of fixed effects/random effects models to ascertain the long-run relationships between poverty, income inequality, and growth using pooled data from eight household income and expenditure surveys conducted between 1992/93 and 2007/08 in Pakistan. The results show that growth and inequality play significant roles in affecting poverty, and that the effect of the former is substantially larger than that of the latter. Furthermore, growth has a significant positive impact on inequality. The results also show that the absolute magnitude of net growth elasticity of poverty is smaller than that of gross growth elasticity of poverty, suggesting that some of the growth effect on poverty is offset by the rise in inequality. The analysis at a regional level shows that both the gross and net growth elasticity of poverty are higher in rural areas than in urban areas, whereas the inequality elasticity of poverty is higher in urban areas than in rural areas. At a policy level, we recommend that, in order to reduce poverty, the government should implement policies focusing on growth as well as adopting strategies geared toward improving income distribution.
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Bibliographic InfoArticle provided by Department of Economics, The Lahore School of Economics in its journal Lahore Journal of Economics.
Volume (Year): 17 (2012)
Issue (Month): 2 (July-Dec)
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Web page: http://www.lahoreschoolofeconomics.edu.pk/EconomicsJournal/LJEIntro.aspx
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Poverty; inequality; growth; pooled data; Pakistan.;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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