Addressing the Pitfalls of Single Poverty Line in the Estimation of Poverty in Different Regions of Pakistan

Fatima Bashir and Muhammad Idrees

Abstract

Highlighting the importance of region- specific poverty lines, the study examines the biasness of single poverty line that is widely used in the measurement of poverty in Pakistan. Since consumption patterns and unit cost of calorie varies substantially across different regions, so the over-reliance on single poverty line is not viable as it suppresses all the relevant information and eventually result in misleading poverty assessment. Cost of basic needs approach is applied on the recently available HIICS/ HIES data of 2015-16 to evaluate estimates from single and regional- specific poverty lines. The comparison of poverty incidences revealed the biasness as results appear to be extensively dissimilar based on two approaches, such as the urban poverty is found to be higher than rural one in case of regional poverty lines indicating that the extent of urban poverty is systematically under[1]estimated by the use of single poverty line. Furthermore, the province-wise poverty rankings differ drastically in both cases. The study found that region-specific poverty lines are consistent and appropriate for poverty analysis as the estimates based on single poverty line fails to capture regional price variations and consumption patterns.