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Sources of income inequality in rural Pakistan : a decomposition analysis

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  • Adams, Richard H. Jr.
  • Alderman, Harold

Abstract

Using panel data from a three-year study of 727 households, the authors identify the sources of income inequality in rural Pakistan. First, theydecompose total rural income among five sources: agricultural, livestock, rental, nonfarm, and transfer income. This decomposition shows that agricultural income contributes most to inequality in total rural income. Next, they decompose the sources of inequality in agricultural income. This leads to the surprising finding that inequitable ownership of land is not the main source of inequality in agricultural income. Income from returns to labor and crop profits contribute most to this area of inequality. One way to reduce rural income inequality might be to find more ways to narrow the disparities between abilities, perhaps by teaching more managerial and technical skills to agriculturists. According to the authors, policy makers concerned about inequality in rural Pakistan would also be well advised to pay more attention to livestock. Income from livestock apparently decreases the inequalities in income.

Suggested Citation

  • Adams, Richard H. Jr. & Alderman, Harold, 1992. "Sources of income inequality in rural Pakistan : a decomposition analysis," Policy Research Working Paper Series 836, The World Bank.
    • Handle: RePEc:wbk:wbrwps:836
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    Cited by:

    1. Reardon, Thomas, 1997. "Using evidence of household income diversification to inform study of the rural nonfarm labor market in Africa," World Development, Elsevier, vol. 25(5), pages 735-747, May.
    2. Khadija Shams & Alexander Kadow, 2020. "Income inequality, remittances and economic wellbeing in rural Pakistan: linkages and empirical evidence," Asia-Pacific Journal of Regional Science, Springer, vol. 4(2), pages 499-519, June.
    3. Shams, Khadija, 2012. "Income inequality in rural Pakistan-sources and decompositions," MPRA Paper 39318, University Library of Munich, Germany.
    4. Zhao, Sudan & Jiang, Yongmu, 2022. "Heterogeneous effects of rural–urban migration and migrant earnings on land efficiency: Empirical evidence from China," Land Use Policy, Elsevier, vol. 115(C).
    5. Estudillo, Jonna P. & Quisumbing, Agnes R. & Otsuka, Keijiro, 2001. "Income distribution in rice-growing villages during the post-Green Revolution periods: the Philippine case, 1985 and 1998," Agricultural Economics, Blackwell, vol. 25(1), pages 71-84, June.
    6. Puja Guha, 2014. "Economics of Migration and Remittances: A Review Article," Working Papers id:5618, eSocialSciences.
    7. Fambon, Samuel, 2009. "Inequality in the Distribution of Household Expenditure in Cameroon," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 43, Verein für Socialpolitik, Research Committee Development Economics.
    8. Alarcon, Diana & McKinley, Terry, 1997. "The rising contribution of labor income to inequality in Mexico," The North American Journal of Economics and Finance, Elsevier, vol. 8(2), pages 201-212.
    9. Richard H. Adams, JR., 1993. "Non-farm Income and Inequality in Rural Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 1187-1198.
    10. Asma Kanwal & Nwakego Eyisi, 2023. "Income Inequality and Frontend Innovation: Evidence from Frontier Markets," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 255-286, March.
    11. Zsóka Kóczán & Franz Loyola, 2021. "How do migration and remittances affect inequality? A case study of Mexico," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(2), pages 360-381, March.
    12. Taylor, J. Edward & Mora, Jorge & Adams, Richard H., Jr. & Lopez-Feldman, Alejandro, 2005. "Remittances, Inequality and Poverty: Evidence from Rural Mexico," Working Papers 60287, University of California, Davis, Department of Agricultural and Resource Economics.
    13. Xu, Yecheng & Zhang, Yaoqi & Chen, Jiquan & John, Ranjeet, 2019. "Livestock dynamics under changing economy and climate in Mongolia," Land Use Policy, Elsevier, vol. 88(C).
    14. Amar Iqbal Anwar & Mazhar Mughal, 2012. "Remittances, inequality and poverty in Pakistan: macro and microeconomic Evidence [Centre d'Analyse Théorique et de Traitement des données économiques REMITTANCES, INEQUALITY AND POVERTY IN PAKISTA," Working Papers hal-01885153, HAL.
    15. Barrett, Christopher B. & Reardon, Thomas, 2000. "Asset, Activity, And Income Diversification Among African Agriculturalists: Some Practical Issues," Working Papers 14734, Cornell University, Department of Applied Economics and Management.
    16. Molden, David & Oweis, T. Y. & Pasquale, S. & Kijne, Jacob W. & Hanjra, M. A. & Bindraban, P. S. & Bouman, Bas A. M. & Cook, S. & Erenstein, O. & Farahani, H. & Hachum, A. & Hoogeveen, J. & Mahoo, Hen, 2007. "Pathways for increasing agricultural water productivity," Book Chapters,, International Water Management Institute.
    17. Felix Naschold, 2009. "Microeconomic Determinants of Income Inequality in Rural Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 746-768.
    18. Bogale, A. & Hagedorn, K. & Balu, G., 2001. "The Dimensions of Poverty and Inequalty: A Focus on Rural Households in Ethopia," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 37.
    19. Amara Amjad Hashmi & Maqbool H. Sial & Maaida Hussain Hashmi, 2008. "Trends and Determinants of Rural Poverty: A Logistic Regression Analysis of Selected Districts of Punjab," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 909-923.
    20. Hari Ram Lohano, 2009. "Poverty Dynamics in Rural Sindh, Pakistan," Working Papers id:2334, eSocialSciences.
    21. Alderman, Harold & Garcia, Marito, 1993. "Poverty, household food security, and nutrition in rural Pakistan:," Research reports 96, International Food Policy Research Institute (IFPRI).
    22. Taylor, J. Edward & Mora, Jorge, 2006. "Does migration reshape expenditures in rural households? Evidence from Mexico," Policy Research Working Paper Series 3842, The World Bank.
    23. Mehtabul Azam, 2016. "Income Inequality in India 2004-2012: Role of Alternative Income sources," Economics Bulletin, AccessEcon, vol. 36(2), pages 1160-1169.

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