Influencing Factors of Poverty in Pakistan: Time Series Analysis

Authors

  • Rizwan Akhtar Department of Economics Karakoram International University Gilgit Baltistan Pakistan
  • Hongman Liu Associate Professor College of Economics and Management, China Agriculture University, Beijing China
  • Amjad Ali Department of Economics Karakoram International University Gilgit Baltistan Pakistan

Abstract

 

Poverty is one of the emerging problems being discussed and debated in various developed and developing countries including Pakistan. This study investigates influencing factors of poverty in Pakistan and discusses the theoretical linkages between poverty and its main macroeconomic variables. For this Johansen co-integration technique has been applied with multi diagnostics tests. The macroeconomic variables taken in this study are agricultural ratio to GDP, ratio of Foreign Direct Investment (FDI) to GDP, ratio of the primary education, ratio of the domestic credit to private sector and military expenditure as percentage of GDP. Results of the study show that all these variables have significant effect on poverty. In the case of agricultural ratio to GDP, an increase in agricultural output leads to decrease poverty. Education enrollment also has significant negative impact on poverty in long run. It helps in reducing poverty and improving the socio economic status of both the individuals as well as the society.  Domestic credit has also significant negative impact on poverty but military expenditure has significant positive impact on poverty in Pakistan.

Keywords: Headcount Index, Foresing Direct Investment, Economic Growth, Pakistan,

JEL Classifications: C50, I32, E60, E62

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Author Biographies

Rizwan Akhtar, Department of Economics Karakoram International University Gilgit Baltistan Pakistan

Lecturer Department of EconomicsKarakoram International University Gilgit Baltistan Pakistan

Hongman Liu, Associate Professor College of Economics and Management, China Agriculture University, Beijing China

Associate ProfessorCollege of Economics and Management, China Agriculture University, Beijing China

Amjad Ali, Department of Economics Karakoram International University Gilgit Baltistan Pakistan

LecturerDepartment of EconomicsKarakoram International University Gilgit Baltistan Pakistan

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Published

2017-04-03

How to Cite

Akhtar, R., Liu, H., & Ali, A. (2017). Influencing Factors of Poverty in Pakistan: Time Series Analysis. International Journal of Economics and Financial Issues, 7(2), 215–222. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/3349

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Articles