Consumption expenditure a proxy to assess peoples’ welfare, rises by 14%: HIES 2018-19

July 01, 2020 (MLN): The household consumption expenditure considers as a major proxy to asses peoples’ welfare in a country. Pakistan’s average monthly household expenditures have increased by 14% to Rs 37,159 thousand in 2018-19 as compared to Rs 32,578 in 2015-16, revealed Household Integrated Expenditure Survey (HIES) 2018-19, published by Pakistan Bureau of statistics (PBS).

According to survey report, there is a wide gap between urban and rural consumption pattern as consumption expenditures in urban areas are much higher than rural areas. People who live in urban areas, consumed on average Rs 47,362, while who live in rural areas, their monthly average consumption as per survey were Rs 30,908 in 2018-19.

With regards to average per capita consumption expenditure, which was Rs 5,166 in 2015-16 increased to Rs 5,959 in 2018-19. Breaking the household into quintile, in way that poorest household are grouped together into 1^st quintile, those with higher consumption into the second quintile and so on, shows that the average individual expenditures for the richest quintile in urban and rural areas are more than four times than the poorest quintile. However, there is not much difference between the average per capita expenditure for poorest quintile in rural and urban areas whereas it is significantly higher in urban areas than the rural areas for richest quintile.

As household’s consumption expenditures depend on the monthly income, the below graph shows that an average monthly income of a household in 2018-19 increased by 16.5% to Rs 41,545 compared to Rs 35,662 reported in a last HIES survey 2015-16.

Meanwhile, the breakdown indicates that the pattern of average household income is very much similar to its Consumption pattern. Among total households, households of the richest quintile are having the average income almost three times as compared to lowest quintile of households in urban areas and rural areas. However, the gap between lowest and highest quintile are more pronounced in urban areas.

Furthermore, according to the survey report, the average monthly income that a person earn in the country  during 2018-19 increased to Rs 6,662 as compared to Rs 5,653 in the previous survey of 2015-16, moreover, it can easily be observe from the graph below that the difference in the per capita income between fourth quintile to fifth quintile is almost doubled.

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