Poverty Dynamics: How Well Do Pakistan’s Provinces Compare?

Abstract

Addressing South Asia’s poverty, this research presents an exhaustive case study of Pakistan, exploring poverty dynamics at national and provincial levels, emphasizing the urban–rural divide. The study uses the most recent income and expenditure surveys from 2013 and 2015 and applies the Cost of Basic Needs methodology based on strong theoretical and empirical grounds. The research adjusts for price variation within and among provinces. It uses traditional Foster-Greer-Thorbecke measures and innovative measures like the Watts and Sen indices. Findings reveal a poverty decline in Pakistan between 2013 and 2015, with significant provincial variations in this decline. Despite a minor decline in the headcount ratio of the larger provinces, their poverty shares increased in 2013–15, showing a regional convergence trend with growing disparities in poverty headcount and depth. Using indices like Watts and Sen gives a more complete, nuanced poverty understanding, highlighting the need for their adoption alongside traditional measures. The research ends with policy implications, emphasizing the importance of targeted poverty reduction strategies to address regional disparities effectively. This research offers insights into South Asia’s poverty dynamics and contributes significantly to SDG 1—ending poverty. The Pakistan case study is a valuable reference for other countries, guiding accurate poverty measurement, effective policy-making, and efficient SDGs performance tracking.