The LEAPS Report 2008

Document Sample
The LEAPS Report 2008 Powered By Docstoc
					The Geography and Lives of the
 Poor: Evidence from Punjab

              Ali Cheema
              Lyyla Khalid
            Manasa Patnam
    Lahore University of Management
             Sciences 2008
            What is to follow
• Identifying endemic poverty regions

• Changing regional socio-economic paths

• Poverty impact of different paths

• HH strategies and payoffs in different regions

• Where do regional differences come from
                 Motivation
• Lack of evidence on district-wise variation in
  poverty [World Bank 2002; Anwar, Qureshi and
  Ali 2004; Qureshi and Arif 2001)

• Some Exceptions [Jamal PDR 2005; Malik 2005
  and Gazdar 1999]

• Putting poverty incidence in context of socio-
  economic change

• Reveal patterns not causality
          Constructing the Consumption Aggregate
         Dataset: Punjab MICS (2003-04) representative at district level

Money-metric measure

The Aggregate Consumption Function (ACF) is constructed as follows:
a. Aggregate the various sub-components
b. Adjust for cost of living differences: Deflating Total Household Expenditure by
    Paasche’s Index to capture cost of living
c. Adjust for household composition

The Sub-components of ACF can be classified into four categories:
i. Food items
ii. Non-food items
iii. Consumer durables

Use Poverty line for 2000-02 defined by Planning Commission (Economic Survey
   2006-07) and adjust it using CPI
Equivalence Factors for age/sex-specific official poverty lines
               Age Bracket                   Energy Per Person        Daily Requirement
               Children



               <1                            1010                     0.4298
               1-4                           1304                     0.5549
               5-9                           1768                     0.7523
               Males



               10-14                         2,816                    1.1983
               15-19                         3,087                    1.3136
               20-39                         2,760                    1.1745
               40-49                         2,640                    1.1234
               50-59                         2,640                    1.0468
               60 or more                    2,146                    0.913
               Females



               10-14                         2464                     1.0485
               15-19                         2332                     0.9881
               20-39                         2080                     0.8851
               40-49                         1976                     0.8409
               50-59                         1872                     0.7966
               60 or more                    1632                     0.6945


                     Source: Poverty Reduction Strategy Paper, 2003
              The Geography of Poverty


                                                       Poor      Non Poor
• High poverty clustered in
  the South and West          North                      21.31        78.69

  regions
                              Centre                     28.76        71.24


                              South                      50.79        49.21
• Constitute crescent of
  endemic poverty             West                        52.1         47.9
                              Source: MICS (2003-04)


                              North: Pindi, Chakwal, Jhelum And Attock
                              South: R.Y.Khan, Bahawalpur, Bahawalnagar,
                                  Multan, Lodhran, Khanewal And Vehari
                              West : Mianwali, Khushab, Bhakkar, Lyyah,
                                  Muzzafargarh, DG Khan And Rajanpur
                              Centre : All Others
     The Geography of Poverty
Head Count Overall   Head Count Rural
     The Geography of Poverty
Poverty Gap Overall   Poverty Gap Rural
     The Geography of Poverty
• High poverty clustered in the South and
  South West districts

• Severity of poverty highest in these districts

• Deprivation index correlated with district
  poverty
                             Measuring Deprivation
Deprivation Indices:
                                   Index 1
Ø   Education
     Illiteracy Rate (10 years and above)- female
     Illiteracy Rate (10 years and above)- male
     Proportion out of school Children – female
     Proportion out of school Children – male

Ø   Housing Quality
     Proportion of Non-Pacca houses
     Persons per room
     Percentage of housing Units with one room
     Percentage Non-owner households
     Households with no latrine facility
Ø   Housing Services
     Percentage of Unelectrified households
     Percentage of households without gas
     Percentage of households with no inside piped water connection
     Households with no telephone connection
Ø   Employment
     Unemployment rate [15 - 65 years]

     Combining the indicators
     – Equal weights to different components of the index
     – Weights assigned by using principle component analysis (PCA)
       Choice of Method and Sensitivity of Rankings

                                       Index1        Index1 Rank        District          Index1
Index1    Rank                         Rank          (Average)                            Rank
(Average)             District         (PCA)                                              (PCA)
                 32   Rahim Yar Khan            34                 14   Multan                     17
                 31   Lodhran                   33                 13   Narowal                    16
                 34   Muzaffargarh              32                 12   Hafizabad                  15
                 33   Rajanpur                  31                 11   T.T.Singh                  14
                 28   D.G.Khan                  30                 18   Khushab                    13
                 26   Bahawalpur                29                 17   Mianwali                   12
                 27   Okara                     28                 15   Mandi bahauddin            11
                 29   Bhakkar                   27                 9    Sargodha                   10
                 21   Vehari                    26                 5    Faisalabad                 9
                 23   Bahawalnagar              25                 8    Gujrat                     8
                                                                   7    Jhelum                     7
                 24   Pakpattan                 24
                                                                   10   Attock                     6
                 22   Khanewal                  23
                                                                   4    Gujranwala                 5
                 25   Jhang                     22
                                                                   3    Sialkot                    4
                 30   Layyah                    21
                                                                   2    Lahore                     3
                 20   Kasur                     20
                                                                   6    Chakwal                    2
                 16   Sheikhupura               19
                                                                    1   Rawalpindi                  1
                 19   Sahiwal                   18
                    Index 2 Includes Social Indicators:
               Under 5 Mortality Rates and Ante Natal care by skilled health workers


Index2 (PCA)        District         Index2            Index2    District          Index2 (Average)
                                     (Average)         (PCA)

               34   Lodhran                      29        17    Multan                           15
               33   Rahim yar Khan               28        16    Hafizabad                        12
               32   Rajanpur                     33        15    Narowal                          13
               31   Muzaffargarh                 34        14    Khushab                          19
               30   Bhakkar                      31        13    T.T.Singh                        10
               29   Bahawalpur                   27        12    Mianwali                         18
               28   Okara                        26         11   sargodha                             9
               27   Bahawalnagar                 23        10    Mandi Bahauddin                  14
               26   Pakpattan                    25         9    Faisalabad                           6
               25   D.G.Khan                     32         8    Attock                               11
               24   Vehari                       24         7    Gujrat                               5
               23   Khanewal                     21         6    Jhelum                               8
               22   Jhang                        22         5    Gujranwala                           4
               21   Layyah                       30         4    Sialkot                              3
               20   Kasur                        20         3    Chakwal                              7
               19   Sheikhupura                  16         2    Lahore                                1
               18   Sahiwal                      17          1   Rawalpindi                           2
     Ranking of Most Deprived Districts
            Index 1 & 2 combined with HCRs
      Index 11         Index 22        MICS      SPDC
                                      2003-04    2007
1     Rajanpur         Rajanpur      Rajanpur   Lodhran


2     RYKhan           RYKhan        D.GKhan    MGarh


3      MGarh           Lodhran        Bhakhar   Rajanpur


4     Lodhran           MGarh         MGarh     Layyah
5     D.GKhan           Bhlpur        Bhlpur    D.GKhan
6      Bhlpur          D.GKhan        Lodhran   Pkpattan


7      Okara           Bhlnagar      Pkpattan   RYKhan
8     Bhlnagar          Okara        Bhlnagar    Bhlpur


9     Pkpattan         Pkpattan       RYKhan     Vehari
10     Layyah          Bhakhar         Kasur     Jhang
        Divergent Socio-Economic Paths


                                          35.00




• Access to land                          30.00



  deteriorating sharply
  for landless
                                          25.00




                                          20.00                                                       North




                          (% Farm Area)
                                                                                                      Centre
                                                                                                      West

                                          15.00                                                       South



• Similar trend across
  all regions
                                          10.00




                                          5.00




                                          0.00
                                                  1980                  2000   1980            2000

                                                         Sharecropped                 Leased
        Divergent Socio-Economic Paths



• Mitigated by
  diversification out of
  agriculture in North
  and Centre

• Continued agrarian
  dependence in the
  South and West

                           Source: Population Census (1997) and MICS
                           (2003-04)
                The Poverty Impact



• Diversification out of
  agriculture negative
  correlate of poverty

• Limited possibilities in
  the South and West
  exacerbating problem


                             Source: MICS (2003-04)
               The Poverty Impact




• Deteriorating access
  to land worsening
  matters




                         Source: MICS (2003-04)
              The Poverty Impact

• Incidence of poverty
  much higher
  – Labour dependent
    HHs
  – Long-term
    unemployed


• Effect more
  pronounced in South
  and West
                         Source: MICS (2003-04)
               Using dependents!




• Proportion of
  dependents much
  higher in South and
  West




                        Source: MICS (2003-04)
                 The Poverty Impact




• Related vulnerabilities
  in the South and West




                            Source: MICS (2003-04)
              HH Coping Strategies




• Intra HH occupational
  diversification

• Similar trend across
  all regions



                          Source: MICS (2003-04)
                    Does it pay?




• Not at the same rate
  across all four regions!

• Much flatter effect in
  the South and West




                             Source: MICS (2003-04)
              Creating Remittances




• Stark regional
  differences




                       Source: MICS (2003-04)
              The Remittance Effect




• Strong negative
  correlate of poverty




                         Source: MICS (2003-04)
   Migration and                                 Prop. Remittance Income
                                                                Coeff.           T-Stat
   Remittances
                                  hh size                           -0.004            -11.8
                                  District Dummies                         Yes


• No of migrants per HH           R-Squared                        0.0851         
                                  N                                 29258         
  explains a large part of
  variation in remittances                       Prop. Remittance Income
                                                                Coeff.       T-Stat

• However, presence of            hh size                          -0.029            -15.06
  endogeneity                     No. Migrants                      .0693            108.21
                                  District Dummies                         Yes


                                  R-Squared                          0.21     
                                  N                                 29258     



                             Source: MICS (2003-04)
      Migration and
                                                       No. Migrants (First Stage)
                                                                            Coeff.        T-Stat



      Remittances                     hh size
                                      Rainfall
                                                                           -.00001
                                                                           0.0006
                                                                                           -0.00
                                                                                          11.46
•   Use mean rainfall as IV for       North                                  -0.09         0.04
    number of migrants                South                                  0.114         4.27
                                      West                                   0.102         3.91

     – Controlling for HH size
       West and South more            R-Squared                            0.0673     

       migrants per HH                N                                     29258     

     – But proportion of                         Prop. Remittance Income (Second Stage)
       remittance income much                                               Coeff.        T-Stat
       less in South and West
                                      hh size                               -0.004        -13.44
•   Indicates migrants from North     No. Migrants                           0.101        10.01
    entering a different segment of   North                                  0.067        15.66
    labour market                     South                                 -0.015         -5.87
                                      West                                  -0.008         -2.88


                                      R-Squared                                0.3    
                                      N                                     29258     

                                      Source: MICS (2003-04), Punjab Economic Report (2004-05)
  Missing Investments




• In part the answer lies
  in missing
  investments




                            Source: MICS (2003-04)
                                                   Poor 
                                                           Coeff.              T-Stat
 Where do the differences
      come from?            North
                            South
                                                                0.059856            1.04
                                                                0.023486            1.28
                            West                                0.026934            1.52
                            percentage displaced                0.049831            2.25
                            Canal                               -0.13063             -9.5
                            Military                            -0.00566             -8.8
• History                   Rainfall                                -3.5E-05        -1.27
                            wheat_area                          -0.00117            -7.76
                            rice_area                           0.000372            5.42
• An earlier migration      cotton_area                         0.000504            4.45
                            tot_area_sown                       9.91E-05            1.79
                            tot_irrig                           0.000235            3.21
• A large part still        no_factories<100                    -0.00021           -15.05
  unexplained!              no_factories>100                    0.000318            3.18


                            R-Squared                                 0.08      
                            N                                        29258      


                            Source: MICS (2003-04), Punjab Economic Report (2004-05)
                Determinants
                                          Poor 
                                                  Coeff.     T-Stat

                       Regional 1                 -0.074     -8.11
• Much of the          Regional 2
                       Regional 3
                                                     0.22
                                                  0.2333
                                                             30.08
                                                              28.5
  variation within
                       R-Squared                  0.0568 
  district             N                           29258 

                                          Poor 
                                                  Coeff.     T-Stat
• Started exploring
                       Regional 1                  0.015      0.74
  tip of the iceberg   Regional 2                 0.2043     11.15
                       Regional 3                  0.128         6
                       District Dummies                Yes

                       R-Squared                  0.101 
                       N                          29258 

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:0
posted:7/16/2013
language:English
pages:29