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As one of the dimensions of vulnerability, this paper empirically investigates the inability of rural dwellers to cope with negative income shocks. A variable coefficient regression model is applied to a two-period household panel dataset collected in the North-West Frontier Province, Pakistan, an area with high incidence of income poverty and low human development. The empirical model allows for a different ability to smooth consumption, approximated by a linear function of households’ attributes, and controls for the endogeneity of observed changes in income, using qualitative information on subjective risk assessment. Estimation results show that the ability to cope with negative income shocks is lower for households that are aged, landless and do not receive remittances regularly. [ABSTRACT FROM AUTHOR]

Inequality matters for poverty reduction. However, it is often unclear what policy could do to change the distribution of income as to date there is little quantitative evidence about the household characteristics that determine the level of income inequality and its changes over time. This paper sets out to identify these determinants by adapting a regression-based inequality decomposition technique and applying it to panel data from rural Pakistan. Land ownership is key to explaining the level of inequality, but not its changes. In contrast, higher education drives changes, but not the level of inequality. Household location affects both, reflecting growing differences in market access across regions. [ABSTRACT FROM AUTHOR]

Reporting the results of a novel survey of shocks, coping, outcomes, and safety nets in Pakistan, we find high incidence and cost of shocks borne by households, with health and other idiosyncratic shocks dominating in frequency, costliness, and adversity. Sample households lack effective coping options and use mostly self-insurance and informal credit. Many shocks result in food insecurity, informal debts, child and bonded labour, and recovery is slow. Private and public social safety nets exist but offer little effective protection. Public action is needed to better control public health hazards and provide non-exploitative credit and more effective safety nets. [ABSTRACT FROM AUTHOR]

Presents information on a study which investigated the magnitude of chronic or transitory poverty making an explicit adjustment for measurement error using a five-year panel of 686 households from rural Pakistan. Methodology of the study; Results and discussion on the study; Conclusions.