Journal Article

Quantifying Vulnerability to Poverty in a Developing Economy

Haq, Rashida

2015

Overview

In recent years, development policy has increasingly been recognised that a household's sense of well-being depends not just on its average income or expenditures, but also on the risks it faces. Hence vulnerability is a more satisfactory measure of welfare. Application of the methodology to data from Pakistan shows that in 2010 households faced on average a 20.7 percent of poverty level while 34.4 percent chance of becoming poor in the future. When decomposing vulnerability into poor and non-poor households, it was figured out that 95 percent poor household are vulnerable and 18 percent non-poor households are vulnerable. The model measuring determinants of vulnerability indicate that households head with no education, large family size, high number of dependents, poverty status, lack of productive assets, agricultural shocks, high cost of shock and rural residence have significantly higher probability of being poor in future. Finally, it can be concluded that policy makers should be aware of social risk management strategies as an integral part of poverty alleviation programme.

• Publisher: Pakistan Institute of Development Economics
• Subject: Economic development / Economic indicators / Forecasts and trends / Measurement / Methods / Pakistan / Poverty rate / POVERTY REDUCTION AND DEVELOPMENT