Beruflich Dokumente
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Prof. Imran
Ag# :
Abstract
This presentation used PSLM and MICS household level data to analyze the impact of higher food and energy prices on the poverty head count in Pakistan. Simulated food and energy price shocks present some important results:
First, the impact of food price increases on Pakistani poverty levels is
significantly higher for rural populations as compared to urban populations. poverty levels: For Pakistan as a whole, a 20% increase in food prices would lead to an 8% increase in the poverty head count ( from 36% to 44%).
150
100
50
0 Jan-95
Jan-97
Jan-99
Jan-01
Jan-03
Jan-05
Jan-07
Source: DECPG
October 2010
One-half of Pakistans population is considered to be
meat, requiring large quantities of grain to raise) Bio-fuel initiatives in developed countries Speculation in commodities markets
and transport costs) Disruptive weather patterns negatively affecting harvests in several regions
Data Sources
The data is taken from two different sources:
Household level data from the Pakistan Social and Living
Standards Measurement Survey (PLSM), 2004-2005 (using data on 14,100 households and 96,833 people)
Household level data from the Punjab Multiple Indicators
Cluster Survey (MICS), 2003-2004 (using data on 29,342 households and 192,398 people)
person. person.
For MICS data, the poverty line used was Rs. 750 per A household was characterized as poor if the average
people as a proportion on the population that had incomes below the poverty line. So a poverty head count of 0.30 implies that 30% of the population lies below the poverty line.
gas, electricity, cooking and heating oil and other fuel related expenditures) (3) Educational Expenditures (4) Medical Expenditures (5) Other Expenditures
Figure 3: Expenditure Shares on Major Budget Items by Income Per Capita Deciles in Pakistan (PSLM)
0.7 0.6 0.5 FOOD 0.4 0.3 0.2 0.1 0 MEDICAL EDUC ENERGY
EC
EC
EC
EC
EC
C IL E
EC
D E
D E
D E
4T H
5T H
6T H
7T H
8T H
9T H
1S
expenditures which fall as a proportion of total expenditures as the income level increases. After food, the second most major expenditure category across households was energy expenditures
10 TH
2N
3R
Figure 4: Expenditure Shares on Major Budget Items by Income Per Capita Deciles in Punjab (MICS)
0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 FOOD MEDICAL EDUC ENERGY
EC
EC
EC
EC
EC
C IL E
EC
D E
D E
D E
4T H
5T H
6T H
7T H
8T H
9T H
1S
majority of expenditures and energy expenditures having the second largest budget share
10 TH
2N
3R
incomes given in the PSLM and MICS data sets for shocks to the price of food and energy.
Given that the price rises will reduce real incomes, the price
We then recalculate what the new poverty head-count ratio Price shocks of 1%, 5%, 10%, and 20% on the price of food
and energy are simulated and the impact on the poverty head count is analyzed.
PSLM Results
Simulated Poverty Head Counts in Pakistan After Increases in the Prices of Food and Fuel (PSLM Data)
Base Poverty Head Count for Pakistan = 0.364 1% Increase 5% Increase 10% Increase 20% Increase
0.368 0.365
0.383 0.367
0.402 0.372
0.441 0.380
Simulated Poverty Head Counts in RURAL vs. URBAN Areas After Increases in the Prices of Food and Fuel (PSLM Data)
Base Poverty Head Count for Rural Areas = 0.457 1% Increase 5% Increase 10% Increase 20% Increase
0.464 0.459
0.482 0.463
0.506 0.469
0.553 0.478
1% Increase
5% Increase
10% Increase
20% Increase
0.222 0.221
0.232 0.222
0.245 0.225
0.271 0.232
Simulated Poverty Head Counts (by Province) after increases in FOOD prices (PSLM Data)
1% Increase PUNJAB Base Poverty Head Count = 0.364 SINDH Base Poverty Head Count = 0.371 NWFP Base Poverty Head Count = 0.392 BALOCHISTAN Base Poverty Head Count = 0.312 5% Increase 10% Increase 20% Increase
0.368
0.379
0.395
0.427
0.376
0.392
0.411
0.453
0.394
0.409
0.434
0.476
0.392
0.395
0.399
0.411
Simulated Poverty Head Counts (by Province) after increases in ENERGY prices (PSLM Data)
1% Increase PUNJAB Base Poverty Head Count = 0.364 SINDH Base Poverty Head Count = 0.371 NWFP Base Poverty Head Count = 0.392 BALOCHISTAN Base Poverty Head Count = 0.312 5% Increase 10% Increase 20% Increase
0.365
0.367
0.372
0.379
0.372
0.376
0.378
0.385
0.392
0.395
0.399
0.411
0.314
0.317
0.323
0.330
MICS Results
Simulated Poverty Head Counts in Punjab After Increases in the Prices of Food and Fuel (MICS Data)
Base Poverty Head Count for Punjab = 0.412 1% Increase 5% Increase 10% Increase 20% Increase
0.428 0.426
0.439 0.427
0.458 0.429
0.501 0.435
Simulated Poverty Head Counts in RURAL vs. URBAN Areas After Increases in the Prices of Food and Fuel (MICS Data)
Base Poverty Head Count for Rural Punjab = 0.480 1% Increase 5% Increase 10% Increase 20% Increase
0.495 0.493
0.508 0.494
0.529 0.496
0.574 0.500
Base Poverty Head Count for Urban Punjab = 0.306 1% Increase 5% Increase 10% Increase 20% Increase
0.325 0.324
0.333 0.325
0.350 0.328
0.389 0.334
Important Results
For Pakistan, substantial changes in the poverty head count
accompanied the 10% and 20% increases in the food prices, increasing the poverty head count to 40.2% and 44.1% respectively. The impact of higher energy prices on poverty is substantially smaller that the impact of food prices.
poverty head count to 50.5% while a 20% increase in food prices pushes the poverty head count to 55.3%. So substantial increases in food prices can be seen to have a dramatic impact on rural poverty levels (at least in the short run, since farmers should eventually benefit from selling at higher prices).
significantly smaller than the impact of food price increases, for all the provinces. The second interesting point worth noting is that though the impact of higher food prices is significant for all the provinces.
Punjab level results obtained from the MICS dataset show
that higher food prices lead to greater poverty in Punjab. 10% and 20% increases in energy prices lead to increases in the poverty head count from 41.1% to 45.8% and 50.1% respectively.
Conclusions
The results show that both food price shocks and energy price
shocks cause higher levels of poverty, though the analysis implies a greater short run impact for food price shocks (assuming that food and energy price shocks are of equal magnitude).
The results show that the negative impact of food price shocks falls
The negative impact of food price shocks is significant across Food price inflation can lead to significant increases in poverty. For
Pakistan as a whole, a 20% increase in food prices would lead to an 8% increase in the poverty head count, from 36% to 44%.
Policy Recommendations
The government must ensure household food security in the face of dramatic food price shocks through targeted safety nets. The government must ensure food security by controlling domestic food prices. Government policies must focus on the supply side in order to stimulate greater food production in the medium and long terms.