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Microeconomic Determinants of Income Inequality in Rural Pakistan

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  • Felix Naschold

Abstract

Inequality matters for poverty reduction. However, it is often unclear what policy could do to change the distribution of income as to date there is little quantitative evidence about the household characteristics that determine the level of income inequality and its changes over time. This paper sets out to identify these determinants by adapting a regression-based inequality decomposition technique and applying it to panel data from rural Pakistan. Land ownership is key to explaining the level of inequality, but not its changes. In contrast, higher education drives changes, but not the level of inequality. Household location affects both, reflecting growing differences in market access across regions.

Suggested Citation

  • Felix Naschold, 2009. "Microeconomic Determinants of Income Inequality in Rural Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 746-768.
    • Handle: RePEc:taf:jdevst:v:45:y:2009:i:5:p:746-768
    DOI: 10.1080/00220380902753193
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    References listed on IDEAS

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    1. Adams, Richard H, Jr & Alderman, Harold, 1992. "Sources of Income Inequality in Rural Pakistan: A Decomposition Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(4), pages 591-608, November.
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    3. Dorosh, Paul A. & Malik, Sohail J., 2006. "Transitions Out of Poverty: Drivers of Real Income Growth for the Poor in Rural Pakistan," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25387, International Association of Agricultural Economists.
    4. Kanbur, Ravi & Lustig, Nora, 1999. "Why is Inequality Back on the Agenda?," Working Papers 127690, Cornell University, Department of Applied Economics and Management.
    5. Adams, Richard H. Jr. & He, Jane J., 1995. "Sources of income inequality and poverty in rural Pakistan:," Research reports 102, International Food Policy Research Institute (IFPRI).
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    Cited by:

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    3. Nuno Crespo & Nádia Simões & Ana Paula Diogo, 2012. "Determinant Factors of Income Inequality – Evidence from a Portuguese Region," Economics Bulletin, AccessEcon, vol. 32(3), pages 2056-2064.
    4. Mohsen Ayyash & Siok Kun Sek, 2020. "Decomposing Inequality in Household Consumption Expenditure in Malaysia," Economies, MDPI, vol. 8(4), pages 1-15, October.
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    6. Amirah El-Haddad & May Gadallah, 2018. "The Informalization of the Egyptian Economy (1998-2012): A Factor in Growing Wage Inequality?," Working Papers 1210, Economic Research Forum, revised 12 Jun 2018.
    7. Paolo Verme & Sherine Al-Shawarby & Branko Milanovic & Sahar El Tawila & May Gadallah & Enas Ali A. El-Majeed, 2014. "Inside Inequality in the Arab Republic of Egypt : Facts and Perceptions across People, Time, and Space," World Bank Publications - Books, The World Bank Group, number 17583.
    8. Govinda P. Sharma & Ram Pandit & Ben White & Maksym Polyakov, 2020. "The income diversification strategies of smallholders in the hills of Nepal," Development Policy Review, Overseas Development Institute, vol. 38(6), pages 804-825, November.
    9. Ebru Çaglayan & Naime Irem Kosan & Melek Astar, 2012. "An Empirical Analysis of the Determinants of Household Poverty in Turkey," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(1), pages 181-191, March.
    10. Lwin Lwin Aung & Peter Warr, 2021. "Decomposing changes in inequality: Evidence from Myanmar," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1172-1196, August.

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