Spatial distribution of poverty in Pakistan: an asset-based approach

The main objective of this study is to construct a valid and reliable asset index at household level by using NSER-BISP data in order to compute asset poverty for provinces, districts, and tehsils of the Pakistan. An asset index may be better measure than current income or expenditure for gauging household’s long-term capacity for buying goods and services and its potential resilience to economic shocks. The study employs multiple correspondence analysis (MCA) to construct asset index contrary to principal component analysis (PCA), as MCA provides us weights and contributions of each dimension of binary variable separately. The average MCA score is showing the level of asset-based poverty wherein higher values of index are representing higher level of poverty. The findings indicate that incidence of asset-based poverty is differently observed across provinces and within provinces through disaggregation of the MCA score at district and tehsil levels. By and large, the poorest districts of Pakistan are belonging to Baluchistan (i.e., Sherani, Kohlu, Chaghi, and Dera Bugti) and Sindh (i.e., Badin, Umerkot, Tando Muhammad Khan, and Tharparker) provinces; however, districts of Punjab (i.e., Lahore, Rawalpindi, and Gujranwala) province are found relatively lower asset-based poverty. Further, the analysis highlights the prevalence of asset-based poverty at tehsils level as well where again the tehsils of Baluchistan and Sindh provinces are bearing the highest asset-based poverty. Furthermore, the study also contributes by visualizing the prevalence of geographical asset-based poverty at district level for all four provinces of Pakistan by GIS mapping.