Academic journal article The Lahore Journal of Economics

The Impact of Socioeconomic and Demographic Variables on Poverty: A Village Study

Academic journal article The Lahore Journal of Economics

The Impact of Socioeconomic and Demographic Variables on Poverty: A Village Study

Article excerpt

Abstract

Poverty is a complex phenomenon based on a network of interlocking economic, social, political, and demographic factors. An understanding of the extent, nature, and determinants of rural poverty is a precondition for effective public policy to reduce poverty in rural Pakistan. The present study attempts to analyze the impact of socioeconomic and demographic characteristics of households on poverty, using primary data collected in the village of Betti Nala in Tehsil Jatoi, district Muzaffargarh in southern Punjab. We have used two distinct approaches: (i) a poverty profile, and (ii) an econometric approach in our empirical analysis. The results show that household size, dependency on household, participation, landholdings, and number of livestock have a significant impact on poverty incidence. Our final conclusion is that efforts should be made to improve socioeconomic factors in general and demographic factors in particular to alleviate rural poverty in remote areas of Pakistan, while land should be allotted to landless households.

JEL Classification: A13, C10, J19.

Keywords: Poverty, households, Punjab, Pakistan.

(ProQuest: ... denotes formulae omitted.)

I. Introduction

Most societies have at some time in their development process seen a large number of people living in conditions of poverty, unable to afford the minimum essentials for a decent existence. Poverty, in this sense, has long been a historical fact and continues to be an unfortunate feature of life today. Nevertheless, poverty is not a new topic in development economics. Its alleviation has mostly been associated with high economic growth rates.

Most poor people from less developed countries (LDCs) reside in rural areas and make their living from agriculture. The role of the agrarian structure and institutional settings in general and the rural poor in terms of socioeconomic and demographic factors in particular are of central importance in economic development. Traditionally, however, the agriculture sector and rural economy have been characterized, in most LDCs, by the predominance of a small landowning class, tenants, sharecroppers, and landless laborers who are at the core of the poverty problem. Moreover, rural areas are characterized by relatively low population densities, with maximum population thresholds in settlements.

The major emphasis of Pakistan's model of economic development has been on maximizing the growth of output, leaving too little to take care of mass poverty, socioeconomic disparities, and unfavorable demographic variables. The evidence suggests that Pakistan's economy has shown steady improvement in terms of major macroeconomic indicators. However, in spite of high rates of economic growth, Pakistan's poor, particularly its rural poor, have benefited very little.

A large number of studies on poverty in Pakistan and on rural poverty in particular are available. Most of these studies use data from the Household Income and Expenditure Surveys (HIES) and estimated measures of poverty. Almost all studies agree that rural poverty fluctuated around 40% during the 1960s, then declined in the 1970s and 1980s. The incidence of rural poverty increased in the 1990s, after which it showed a declining trend1 [Naseem (1973), Irfan and Amjad (1984), Malik (1988), Amjad and Kemal (1997), Ali and Tahir (1999), Jafri (1999), Arif et al. (2000), Arif (2000) and Qureshi and Arif (2001)].

Patterns of poverty differ by province, and between rural and urban areas. The data consistently show that poverty is considerably higher in rural areas as compared with urban areas. Punjab accounts for almost 56% of the country's population. About 36% of its rural population is poor and ranks second-highest among the provinces. According to the estimates of the Federal Bureau of Statistics (FBS), 2002, about 40% of the rural population in lower Punjab is poor, the highest incidence after rural NWFP. …

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