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Zakat and Inequality: Some Evidence from Pakistan

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This paper presents empirical evidence on the extent to which zakat---a form of religiously-mandated charity under Islam---achieves its intended objective in Pakistan. Detailed income and expenditure data from Pakistan's Household Income and Expenditure Survey for 1987-88 are used to construct two income distributions---one containing the distribution of income which would have obtained if relevant forms of charity were not given, and one containing the distribution of income which obtains under a regime in which such charitable giving takes place. Atkinson-Kolm-Sen (AKS) ethical relative indices of income inequality are computed for Pakistan and each of its four provinces, for each of these two income distributions, and are compared over a range of parameter values. Evidence is found that zakat does redistribute from the better off to the worse-off, and so achieves some reduction in measured income inequality in Pakistan. Both intra-province and inter-province components of over-all inequality decline, though the amount of change is generally small. These conclusions are shown to be robust to a wide range of normative values the investigator may bring elect.

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  • Jehle, Geoffrey A., 1993. "Zakat and Inequality: Some Evidence from Pakistan," Vassar College Department of Economics Working Paper Series 28, Vassar College Department of Economics.
  • Handle: RePEc:vas:papers:28
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    Cited by:

    1. Fatima Lambarraa & Gerhard Riener, 2012. "On the Norms of Charitable Giving in Islam: A Field Experiment," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 111, Courant Research Centre PEG.
    2. World Bank, 2002. "Poverty Assessment : Poverty in Pakistan - Vulnerabilities, Social Caps, and Rural Dynamics," World Bank Other Operational Studies 15335, The World Bank.
    3. repec:idn:jimfjn:v:1:y:2016:i:2a:p:1-20 is not listed on IDEAS

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