The Livelihood and Poverty Mapping Analysis at Regional Level in Pakistan MSc Development Economics Thesis code: DEC 80433 By Shazia Begum Development Economics Group Supervisor Dr. Marrit van den Berg August, 2015 Wageningen University and Research Centre The Livelihood and Poverty Mapping Analysis at Regional Level in Pakistan Shazia Begum 751220-045-030 August, 2015 Supervisor WUR Dr. Marrit van den Berg MSc International Development Studies Specialization: Economics of Development DEC-80433 i ACKNOWLEDGMENT This research has been quite an exploratory event in my life that took me back to my home country. Despite all the obstacles in the way I sailed through with the help of some of the most inspiring personalities that I ever came across in my life during this research. Firstly, I must record my deep sense of gratitude for my wur supervisor Dr. Marrit van den Berg for her guidance. Her supervision and timely suggestions made it possible for me to complete this research work. I am also grateful to World Bank Joint Japan Graduate Scholarship Program (JJ/WBGS) that financially supported me. Special thanks for the co-operation of Pakistan Social Living Standard Measurement Survey Section of Pakistan Bureau of Statistics for providing the datasets required for my research. It would be injustice if I do not mention about my father, my sister, my brothers, and especially my deceased mother whose prayers still overshadow in all the events of my life. Similarly, I am so very much indebted to my friends and fellow colleagues, Rayke Berendsen , Pauline van Pommeren and Banchayehu Tessema Assefa for their countless advices and suggestions without which the quality of this project as it is now would have been a distant dream. ii Table of Contents ACKNOWLEDGMENT .............................................................................................................. ii List of Tables ................................................................................................................................. v List of Figure ................................................................................................................................. v ABSTRACT .................................................................................................................................. vi 1. Introduction ............................................................................................................................... 1 2. Conceptual framework ............................................................................................................. 4 2.1 The concept of wellbeing ................................................................................................... 4 2.2 Poverty Mapping ..................................................................................................................... 5 2.3 Conceptual framework for multidimensional poverty ........................................................ 7 3. Target Area................................................................................................................................ 8 3.1 Situation analysis for Pakistan ......................................................................................... 9 3.2 Situation analysis for Punjab Province ............................................................................ 9 3.3 Situation analysis for Sindh Province ............................................................................ 10 3.4 Situation analysis for KPK Province ............................................................................. 10 3.5 Situation analysis for Balochistan Province .................................................................. 11 4. Methodology and data ............................................................................................................ 12 4.1 Data ................................................................................................................................... 12 4.1.1 Description of HIES & PSLM ........................................................................................ 12 4.2 Model formation and SAE .............................................................................................. 13 4.3 Multidimensional Poverty ............................................................................................... 16 4.4 Poverty Maps .................................................................................................................... 20 5. Results and Discussions .......................................................................................................... 21 iii 5.1 Regression Analysis ......................................................................................................... 21 5.1.1 Household profile ............................................................................................................... 21 5.1.2 Household Head Characteristics ...................................................................................... 21 5.1.3 Household Welfare Characteristics................................................................................ 23 5.1.4 Assets ................................................................................................................................... 23 5.2 Uni-dimensional poverty across sub-regions of Provinces ................................................ 24 5.3 Multidimensional poverty across sub-regions of Provinces .............................................. 25 5.4 District/Division level Poverty Rates using simulated consumption .............................. 25 5.4.1 Punjab ............................................................................................................................... 26 5.4.2 Sindh.................................................................................................................................. 26 5.4.3 KPK ................................................................................................................................... 27 5.4.4 Balochistan........................................................................................................................ 27 5.4.5 Pakistan ............................................................................................................................. 28 5.5 Reliability of the maps .......................................................................................................... 33 6. Conclusion ............................................................................................................................... 34 6.1 Recommendations ................................................................................................................. 34 Bibliography ................................................................................................................................ 35 APPENDIX A .............................................................................................................................. 40 APPENDIX B .............................................................................................................................. 51 APPENDIX C .............................................................................................................................. 60 iv List of Tables Table 4. 1: Coverage of Households in HIES & PSLM ........................................................... 13 Table 4. 2: Pearson Correlation Matrix .................................................................................... 14 Table 4. 3: Description of Covariates for consumption function............................................ 15 Table 4. 4: The cut-off point for each indicator of dimensions ............................................... 19 Table 4. 5: Weighting scheme for each dimension and indicator ........................................... 19 Table 5. 1: Punjab poverty estimates ........................................................................................ 29 Table 5. 2: Sindh poverty estimates........................................................................................... 30 Table 5. 3: KPK poverty estimates ............................................................................................ 31 Table 5. 4: Balochistan poverty estimates................................................................................. 32 Table 5. 5: Reliability Test ......................................................................................................... 33 List of Figure Figure 2. 1: Development as good change from ill being to wellbeing ..................................... 5 Figure 2. 2: Pakistan Map ............................................................................................................ 8 Figure 4. 1: Dimensions for multidimensional poverty estimation ........................................ 18 Figure 5. 1: Poverty estimates - Uni-Dimensional…………………………………….……...24 Figure 5. 2: Multidimensional Poverty ..................................................................................... 25 v ABSTRACT An attempt has been made to map the incidence of uni-dimensional and multi-dimensional poverty simultaneously arguably for the first time in Pakistan. While multi-dimensional poverty map is calculated using PSLM 2010-11; small area estimation technique is utilized to map uni-dimensional poverty using both nationally representative HIES (Household Integrated Economic Survey) and district-level