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An Assessment of Vulnerability to Poverty in Punjab, Pakistan: Subjective Choices of Poverty Indicators

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Abstract

This paper investigates whether estimating vulnerability to poverty using consumption expenditures and food calorie intake provide consistent policy implications based on the vulnerability as expected poverty framework. Feasible generalized least square (3FGLS) method is applied on large data-set of about 90,000 households in the Punjab province, Pakistan. The results indicate that the analysis based on the two approaches results in considerable geographic differences in the distribution of vulnerability to poverty. The implication of our results is that anti-vulnerability interventions based on monetary indicators of poverty will penalize those regions with low monetary poverty but high nutrition poverty.

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Source: Suryahadi and Sumarto (2003)

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Notes

  1. Vulnerability to poverty is defined as the ex-ante probability of falling below a predetermined welfare threshold defined by a poverty line (Pritchett et al. 2000; McCulloch and Calandrino 2003; Calvo and Dercon 2013; Klasen and Waibel 2015).

  2. Tehsil is the administrative unit of the district. There are 9 divisions, 36 districts, 150 tehsils/towns in the Punjab.

  3. Imai et al. (2010)  suggest the need of using large sample size if vulnerability is to be measured from cross-sectional data-set.

  4. These assumptions are, however, not stringent than those that are made in typical income based measures of poverty such as specification of cardinal utility functions, existence of complete markets, no increasing returns, and no externalities (Chaudhuri et al. 2002; Klasen 2000).

  5. Ligon and Schechter (2004), do not recommend measuring vulnerability with a single cross-section due to the presence of measurement error. However, we provide a robust check of vulnerability estimates for different levels of measurement errors (more on this in the Sect. 3).

  6. We use market exchange rate to express Pakistani rupee in terms of US dollar. For a detailed discussion refer to Freeman’s (2009) critique on the superiority of Purchasing Power Parity (PPP) exchange rate over market exchange rate.

  7. MICS-data contain information on the four shocks that are Fever, TB, Hepatitis, and 2010 Flood.

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Acknowledgments

The Ph.D. scholarship from University of Western Australia (UWA) in support of Mr. Azeem’s research is gratefully acknowledged. The authors would also like to thank the Bureau of Statistics, Punjab for providing the data used in this study.

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Authors and Affiliations

  1. School of Agricultural and Resource Economics (SARE), Faculty of Science, The University of Western Australia (UWA), 35 Stirling Hwy, Crawley, WA, 6009, Australia

    Muhammad Masood Azeem, Amin W. Mugera & Steven Schilizzi

  2. The UWA Institute of Agriculture, The University of Western Australia, Crawley, WA, Australia

    Muhammad Masood Azeem, Amin W. Mugera, Steven Schilizzi & Kadambot H. M. Siddique

  3. Institute of Agricultural and Resource Economics, The University of Agriculture, Faisalabad, Pakistan

    Muhammad Masood Azeem

  4. Centre for Environmental Economics and Policy (CEEP), The University of Western Australia, Crawley, WA, Australia

    Steven Schilizzi

Authors
  1. Muhammad Masood Azeem
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  2. Amin W. Mugera
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  3. Steven Schilizzi
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  4. Kadambot H. M. Siddique
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Correspondence to Muhammad Masood Azeem.

Appendices

Appendix 1

See Table 10.

Table 10 Food and non-food compositiona
Full size table

Appendix 2

See Table 11.

Table 11 Statistical inferences.
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Appendix 3

See Table 12.

Table 12 Correlation matrix of the residuals of the probit equations.
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Appendix 4

See Table 13.

Table 13 Poverty and vulnerability decomposition by education level of the head.
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Appendix 5

See Table 14.

Table 14 Poverty and Vulnerability decomposition by household size.
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Azeem, M.M., Mugera, A.W., Schilizzi, S. et al. An Assessment of Vulnerability to Poverty in Punjab, Pakistan: Subjective Choices of Poverty Indicators. Soc Indic Res 134, 117–152 (2017). https://doi.org/10.1007/s11205-016-1419-x

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