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A Poverty Analysis in Baitadi District, Rural Far Western Hills of Nepal: An Inequality Decomposition Analysis


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  • Maharjan, Keshav Lall
  • Joshi, Niraj Prakash


Occupational caste is deprived in terms of education, and landholding. Due to this laboring and agriculture (specially small animals like goats and poultry) remain the prominent source of income for them. Average income from salaried job is the highest followed by remittance and that from laboring is the lowest. This led to the high concentration of Occupational caste under third and fourth income quartile (poorer). A share of income from agriculture in total income is the highest and the share from laboring is the lowest. Relative concentration coefficient (RCC-ci or gi) shows salaried job has both the highest income disequalizing effect (ci = 1.56 or gi = 1.49) as well as the highest factor inequality weight (wici) followed by agriculture. In case of Melauli, however, salaried job followed by remittance has the highest income disequalizing effect. Negative values of Relative Concentration Coefficient and factor inequality weight for laboring indicate that income from it has the income equalizing effect. Thus, agricultural promotion in rural areas based on labor demand increasing policies with proper market arrangement for the agricultural produce will be helpful to reduce the income inequality. In addition, regulation regarding working hour and minimal wage rate should be strictly enforced for the welfare of those involved in laboring, which is also the poorest.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35384.

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Date of creation: Jul 2007
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Publication status: Published in Nepalese Journal of Development and Rural Studies 2.4(2007): pp. 16-35
Handle: RePEc:pra:mprapa:35384

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Keywords: Coefficient of variation; gini-coefficient; relative concentration coefficient; factor inequality weight;

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  1. Joshi, Niraj Prakash & Maharjan, Keshav Lall, 2007. "Assessment of food self-sufficiency and food security situation in Nepal," MPRA Paper 35385, University Library of Munich, Germany.
  2. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, Econometric Society, vol. 50(1), pages 193-211, January.
  3. Wan, Guang Hua, 2001. "Changes in regional inequality in rural China: decomposing the Gini index by income sources," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, Australian Agricultural and Resource Economics Society, vol. 45(3), September.
  4. Adams, Richard H. Jr. & He, Jane J., 1995. "Sources of income inequality and poverty in rural Pakistan:," Research reports, International Food Policy Research Institute (IFPRI) 102, International Food Policy Research Institute (IFPRI).
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