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Income Inequality Estimation of Rural Region of KP Province: A Gini Coefficient Approach

Income Inequality Estimation of Rural Region of KP Province: A Gini Coefficient Approach

Zaheer Ahmad Qureshi and Khuram Nawaz Sadozai

Department of Agricultural and Applied Economics, The University of Agriculture, Peshawar, Khyber Pakhtunkhwa, Pakistan.

Email: ksaddozai@aup.edu.pk

 

ABSTRACT

This research paper is designed to estimate the income inequality of rural region of Khyber Pakhtunkhwa (KP) Province, Pakistan. This study utilized cross sectional data of House Hold Integrated Economic Survey (HIES) collected by Pakistan Bureau of Statistics to obtain the income and expenditure level of sampled House Hold. The HIES data set of year 2011-12 for KP Province was comprised of the total of 1352 sampled House Hold. However, the sampled rural House Hold was 926. The statistical framework comprised of Lorenz curve and Gini Coefficient to gauge the income inequality in the study area. To assess the income inequality both income and expenditure approaches are employed to construct the Lorenz Curve and Gini Coefficient values. The major finding of this study divulge that the Gini Coefficient value through income approach of rural region of KP province is 0.35 which illustrates that there is 35% of income inequality in rural region of KP. While, the Gini Coefficient value through expenditure approach was observed as 0.30. These results confirm the expected statistical discrepancies between income and expenditure approach. The results were further elaborated through deciles under both income and expenditure approaches. The lower poorest category estimated through deciles contributes 2.78% to the overall rural region’s income. However, the upper richest category shares 30.06% to the aforementioned income. The deciles measured through expenditure approach revealed that the lower poorest category and upper richest category contributes 3.13 and 25.59, respectively. The study concludes that the contribution of poorest category is pretty less in overall income and expenditure of KP Province. This study recommends that the Government of KP province may provide more employment opportunities to the poorest category of KP so that their contribution to overall income and expenditure can be escalated.

 

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Sarhad Journal of Agriculture

September

Vol. 35, Iss. 3, Pages 663-1019

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