A Note on Measurement of Poverty and Income Inequalities in Pakistan: Some Observations on Methodology

Only a few attempts have been made at measuring the extent of poverty and inequalities in the distribution of income in Pakistan [1, 2, 3, 4, 5, 7]. Most, in fact all but one [4], have been based on information collected under the Household Income and Expenditure Surveys [8, 9, 10]. The aim of this paper is to point out the methodological shortcomings in the estimation procedure used in these studies and to suggest an alternative improved methodology for measuring poverty using data from the Household Surveys. It must be pointed out that it is not intended to discuss here at any length the estimates presented to illustrate the application of the suggested methodology.