ABSTRACT
The main aim of this research paper is to construct suitable, valid, reliable and socially realistic asset index at household level in Pakistan by using PDHS micro-data and to estimate the economic disparities in Pakistan by using Gini-coefficient and Palma-ratio. Further, this study has investigated the economic, demographic, cultural and social factors of asset inequality at household level in Pakistan by employing quantile regression analysis. This study elaborates the dimensional structure of the assets by presenting the results from Factor Analysis (Exploratory Factor Analysis) and Principal Component Analysis (Tetrachoric-PCA), and have applied Item Response Theory (IRT) and Classical Test Theory for reliability analysis of the index. The results show that Sindh and Baluchistan provinces are with higher asset inequalities comparing to Khyber Pakhtunkhwa and Punjab. Within Punjab, district Sialkot is outperformer with lowest asset inequalities, district DG khan is ranked at top with highest inequal distribution of assets. The districts Buner, Mirpur, Sohbatpur are with highest economic disparities within the provinces KP, Sindh and Balochistan respectively. Interestingly, the district rank ordering produced by both Gini coefficient and Palma Ratio are similar. The study revealed that the land ownership, the access to financial institutions, household size, and education of head of family have positive and significant impact on asset inequality. Study suggested policy recommendations is that efforts should be made to reduce the effects of inequality. This study also boost to policy makers to arrange public investment in socioeconomic development in economically lagging districts of Pakistan.
