Abstract
In any study of poverty and inequality, the diagnosis of relative poverty is imperative for drawing reasonable policy
responses. Relative Poverty measures the extent and magnitude of poverty by comparing the population at
arbitrary poverty lines. This study is aimed at estimating the incidence, depth and severity of poverty in relative
perspective across regions and over time. While employing HIES data sets, relative deprivations have been
estimated at 50 percent, 66.66 percent, and 75 percent of the mean consumption expenditure of respective
survey years during 1998-99–2004-05. Taking a moderate view of the poverty line at threshold level of 66.66
percent, 41.38 percent population was found relatively poor at country level during 1998-99 with corresponding P1
and P2 at 10.25 and 3.60, respectively. Though the relative poverty has declined (4.31 percent) at country level
during studied period; however, it is still very high (37.78 percent). Inter-provincial dynamics exhibited
improvement in relative poverty at all its levels in NWFP; whereas, mixed trends were observed in other
provinces. Rural relative poverty improved in Sind and Baluchistan while it worsened in Punjab. In case of urban
areas, relative poverty worsened in Sind and Baluchistan. When we compare the trends of relative poverty with
absolute poverty for the same period, trends were largely found opposite for both the interregnum periods.
Moreover, overall dynamics revealed decline in absolute poverty manifolds than relative poverty for the whole
period. The relative poverty dynamics for the whole period (1998-99 to 2004-05), what we call “Difference of
Difference” depicted a decrease of 4.31 percent in population of the relative poor in the country. Provincial
statistics of relative poverty estimates reflect that Punjab was the worst of all provinces for having 45.61 percent
of its population living below the threshold level of 66.66 percent of average consumption expenditures, followed
by Sind (44.41 percent), NWFP (36.40 percent) and Baluchistan (27.04 percent), respectively. Similar ranking is
also observed in case of relative poverty gap and its severity for these provinces. The findings suggest that
instead of uniform policy strategy across the board, policy packages must be defined for absolute poor and
relative poor separately. A two pronged policy scenario is suggested for each province which not only contains
the absolute poverty but addresses the poor as well who are relatively deprived in terms of income, education,
health and empowerment.
