Targeting the Vulnerable and the Choice of Vulnerability Measures: Review and Application to Pakistan

In: The Pakistan development review: PDR, S. 87-103

Abstract

In this paper, the concept of vulnerability of the poor's welfare and its practical measures are scrutinised in order to derive implications for targeting poverty reduction policies toward vulnerable households. As illustration, various measures of vulnerability proposed in the literature are applied to a panel data-set collected from rural Pakistan. The empirical results show that different vulnerability rankings can be obtained depending on the choice of the measure. By utilising these measures, we can identify who and which region is more vulnerable to a particular type of risk. This kind of information is useful in targeting poverty reduction policies. Since the nature of vulnerability is diverse, it is advisable to use the whole vector of various vulnerability measures. JEL classification: I32, I38. Keywords: Vulnerability, Poverty, Risk, Consumption Smoothing, Pakistan.