Internationale Zeitschrift für Wirtschafts- und Managementwissenschaften

Income Diversification of Rural Households in Pakistan

Abstract

Saeeda Batool, Amna Babar, Fatima Nasir and Zara Saeed Iqbal

This article explores diversification patterns among rural households of Pakistan. Using logistic regression analysis of data from Pakistan Rural Household Panel Survey, the relationship of household characteristics, asset endowments and facilitating policy with the choice of diversification of income portfolios is analyzed. The econometric analysis reveals that physical and human capital plays a significant role in defining a household’s choice of diversification; information access and growth of infrastructural facilities, however, remain insignificant. These results when compared with those for countries like China reveal significant similarities. The article presses the need for a significant thrust to rural non-farm economy in the policy design; with greater emphasis on network formation and development in human capital, to enable rural households to benefit from improvements in rural infrastructure.