An Analysis of Major Determinants of Poverty in Agriculture Sector in Pakistan

This study is an attempt to highlight the need to prioritize the agriculture sector in policies aimed at alleviating poverty. The objectives are (1) to estimate and compare the incidence of poverty across various sectors of the economy with special focus on the agricultural sector and (2) to identify the major determinants of poverty in the agriculture sector. Poverty is measured in terms of head count, poverty gap and severity of poverty indices all determined as a function of household consumption level. Households with adult equivalent consumption below a consumption level necessary to acquire basic needs are defined as poor. The estimated measures of poverty are used to compare incidence of poverty across sectors of the economy. Adult equivalent consumption is then regressed against a series of explanatory variables to identify determinants of poverty. Results from consumption model are then simulated to gauge impact of various policy scenarios on poverty levels. Data sets are from the 2001 Pakistan Integrated Household Survey and 2005 Living Standard Measurement Survey