Wealth Inequality Across Farm and Non-Farm Households: Insights from Pakistan

Abstract

This study examines how wealth differs between farm and non-farm households in Pakistan and how these differences vary across regions and provinces. Using nationally representative PSLM 2019-2020 data, a wealth index was constructed to capture household wellbeing through assets and housing quality. Descriptive analysis and OLS regression results show that farm households consistently hold lower wealth than non-farm households. Although this gap narrows after controlling for education, demographics, and household characteristics, a significant disadvantage remains. Spatial analysis reveals that the gap is larger in urban areas and varies across provinces, being smallest in Punjab and much wider in Sindh, Khyber Pakhtunkhwa, and Balochistan. Overall, the findings highlight that livelihood type, location, and structural constraints jointly shape wealth outcomes, emphasizing the need for stronger agricultural support and inclusive non-farm opportunities.

Keywords: Wealth inequality; Farm and non-farm households; Rural livelihoods; Spatial heterogeneity; Pakistan