Estimating Poverty in Pakistan The Non-food Consumption Share Approach
This paper provides a framework within which the sectoral structure of absolute poverty can be analysed. Non-food consumption share approach is used to measure incidence of poverty, which can also be used as a proxy for family welfare. Headcount index is used to examine the structure of poverty by principal sectors of employment. Location index is also presented to evaluate the concentration of the poor in each sector. The results lead to the conclusions that incidence of poverty has increased at all levels and that it is greater in rural areas than in urban areas. There are wide variations in the incidence of poverty among different sectors and it has increased in almost all the sectors except the finance and trade sectors during the period under consideration. The agriculture and construction sectors are found to be badly affected areas. According to the distribution of the poor criterion, the agriculture sector is at the top, followed by the manufacturing, trade, and community and social services sectors. Finally, location index also indicates that the majority of the poor in Pakistan is in the agriculture sector.
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