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A Resource-Based Approach to the Modeling and Simulation of Income Distribution: The Case of Pakistan

Author

Listed:
  • Muhammad Azeem Qureshi

    (Oslo University College, Bahauddin Zakariya University)

  • Matteo Pedercini

    (Capacity Development and Modeling Millennium Institute)

Abstract

Developing countries are affected by evident and persistent asymmetric income distribution. The increasing relevance of this issue to development agendas sets the need for planning tools that can support the analysis of the long-term impacts of alternative policies on income distribution. For this purpose we use a resource-based approach and develop a System Dynamics based simulation model, which we apply to the case of Pakistan. The model focuses on the processes of the accumulation of physical and human capital, which we consider as the endogenous sources of household income. Policy analysis suggests that public investment in education and micro-credit, financed by a modest increase in income tax for the high-income groups, positively affects equitable income distribution and economic growth. We believe that the analytical framework developed integrates and complements existing approaches to modeling income distribution by providing a broader and longer term perspective.

Suggested Citation

  • Muhammad Azeem Qureshi & Matteo Pedercini, 2010. "A Resource-Based Approach to the Modeling and Simulation of Income Distribution: The Case of Pakistan," Journal of Income Distribution, Ad libros publications inc., vol. 19(3-4), pages 65-87, September.
    • Handle: RePEc:jid:journl:y:2010:v:19:i:3-4:p:65-87
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    File URL: http://jid.journals.yorku.ca/index.php/jid/article/view/17481
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    Citations

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    Cited by:

    1. A. Sardi & E. Sorano, 2021. "Dynamic Performance Management: An Approach for Managing the Common Goods," Papers 2102.04090, arXiv.org.
    2. Alberto Sardi & Enrico Sorano, 2019. "Dynamic Performance Management: An Approach for Managing the Common Goods," Sustainability, MDPI, vol. 11(22), pages 1-22, November.
    3. Aima Khan & Muhammad Azeem Qureshi & Pål Ingebrigt Davidsen, 2020. "How do oil prices and investments impact the dynamics of firm value?," System Dynamics Review, System Dynamics Society, vol. 36(1), pages 74-100, January.

    More about this item

    Keywords

    income distribution; dynamic analysis; planning model; government policy; System Dynamics; resource-based approach; Pakistan;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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