Exploring Spatial Patterns and Determinants of Poverty: New Evidence from Pakistan

Kifayat Ullah , M. Tariqmajeed, Ghulam Mustafa

Abstract


This study aims to explore two types of spatial determinants
of district level poverty in Pakistan: factors that have direct effect,
and indirect or spillover effect, on poverty levels of neighbouring
districts. The Spatial Autoregressive (SAR) model has been applied to
estimate previously mentioned objectives. Data of 148 districts were
collected from the National Socio- Economic Registry (NSER), and
provincial development statistics. The Small Area Estimation (SAE)
technique provides district level poverty estimates. Empirical results
reveal that spatial autocorrelation arises owing to the lag effect of
outcome variables, and autocorrelation of error terms with neighbouring
districts. Moreover, results are suggestive of factors that have direct
influence on poverty levels of respective districts. These include
urbanisation, population growth rate, average family size, education,
road infrastructure as well as climatic factors (i.e. monthly
temperature and rainfall). Apart from direct effects, some determinants
of district level poverty have spillover or indirect impact on poverty
levels of neighbouring districts. Such factors include level of
employment, road length, literacy rate, and climatic factors. Poverty in
one district itself has a spillover impact on determining poverty level
of adjacent districts. The findings of this paper suggest that the
government should enhance regional connectivity, which may be helpful in
exploiting the spillover effect of road, health, and education
infrastructure to reduce regional poverty levels in Pakistan.

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DOI: https://doi.org/10.30541/v59i3pp.439-459

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