Income Inequality and Economic Welfare. A Decomposition Analysis for the Household Sector in Pakistan

This study analyses inequality and welfare in Pakistan. The data used is based on "Household Income and Expenditure Surveys" conducted for the years 1979 to 1992-93. To access inequality and welfare across different time periods the data was adjusted for 1992-93 prices (Rs), for the homogeneity of the population adult equivalence scale was used because it is better for examining disparity in economic welfare in a society. For the measurement of welfare Sen's welfare index was applied which, takes into account both the size and the distribution of income. This welfare index also provides a decomposition of total welfare into its components.