All Theses and Dissertations

Degree

Master of Science in Economics

Faculty / School

School of Economics and Social Sciences (SESS)

Department

Department of Economics

Date of Award

Spring 2021

Advisor

Dr. Qazi Masood Ahmed

Second Advisor

Dr. Naeem Uz Zafar

Committee Member 1

Dr. Qazi Masood Ahmed, Institute of Business Administration, Karachi

Committee Member 2

Dr. Naeem Uz Zafar, Institute of Business Administration, Karachi, Pakistan

Project Type

Thesis

Access Type

Restricted Access

Pages

xi, 111

Abstract

This study is an attempt to explore the theoretical and empirical relationship between the money metric and multidimensional poverty in the context of Pakistan. Further, focusing on the discrepancies between both poverty measures using the AF method for multidimensional poverty and Cost of Basic Needs for money metric poverty using the data form Pakistan Social and Living Standard Measurement Survey (PSLM) for years 2004-05 and 2010-11. Based on the existing literature, this research does not consider poverty as a lack of income, but it defines poverty as a deprivation of basic human needs, and cover both poverty measures, multidimensional and money metric. The mismatch between both poverty measures is 33.5 percent in year 2004-05 and it has increased to 34 percent in year 2010-11. In urban areas of Pakistan, the mismatch has also reduced significantly, the population who are MPI and not consumption poor are reduced to 4.9 from 8.0 percent, and the population who are consumption poor and not MPI poor reduced to 18.5 from 21.6 percent. The results in rural areas are different from urban areas. The population that are poor in monetary poverty and not MPI poor remains the same for both years in rural areas. The population which are MPI poor and not monetary poor are increased to 29 percent from 25.3 percent during 2004-05 to 2010-11. The results revealed that the increase in mismatch is a rural phenomenon and the imperfect market structure do not deliver the better health services and adequate education in rural areas as compared to its counterpart. This also implies that the monetary poverty measure did not capture the complexity of poverty, and therefore while computing the poverty, we must consider the various dimensions of poverty. This paper concludes that there is need to estimate both poverty measures separately in order to achieve or develop more comprehensive pro-poor strategy for poverty eradication. Based on the above findings, the study recommends using the both poverty measures for poverty reduction and poverty targeting. This paper support that both money metric and multidimensional poverty are complements and give better insight about complexity of poverty phenomena. This research strongly recommends implementing poverty alleviation policies using the both poverty measures as complementing each other. For future research, the study recommends exploring the dynamics of the relationship between monetary and non-monetary aspect of poverty by using the panel or pseudo panel.

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