Income inequality and its decomposition among farm households in Punjab

Figures & data

Table 1. Distribution of farm households according to multiplicity of income sources, Punjab (per cent)

Income sources	Farm size categories					Overall
	Marginal	Small	Semi-medium	Medium	Large
One	3.70	7.04	4.85	0.85	-	4.16
Two	53.70	64.79	84.24	80.51	85.00	72.51
Three	38.89	26.06	10.30	16.95	15.00	21.52
Four or more	3.70	2.11	0.61	1.69	-	1.81

Source: Authors’ estimates from NSSO data

Table 2. Category-wise extent of participation of farm households in different income sources, Punjab (per cent)

Sources of income	Farm size categories					Overall
	Marginal	Small	Semi-medium	Medium	Large
Crops	100.00	100.00	100.00	100.00	100.00	100.00
Livestock	94.00	90.27	88.01	99.70	100.00	93.34
Casual wages	6.62	1.01	0.27	0.02	-	3.16
Regular wage/salary	30.50	15.04	16.46	16.32	4.75	22.17
Non-farm business	13.77	15.63	7.54	2.24	2.39	10.67

Source: Authors’ estimates from NSSO data

Table 3. Level of income of the farm households across different farm size categories, Punjab (Rs/household/annum)

Income sources	Farm size categories					Overall
	Marginal	Small	Semi-medium	Medium	Large
a) Crops	55,087 (39.69)	148,364 (71.85)	269,561 (79.03)	433,123 (84.00)	911,924 (93.03)	195,411 (71.88)
b) Livestock	24,799 (17.87)	6448 (3.12)	16,039 (4.70)	24,170 (4.69)	52,322 (5.34)	20,433 (7.52)
c) Casual wage	3216 (2.32)	780 (0.38)	68 (0.02)	19 (0.00)	0 (0.00)	1576 (0.58)
d) Regular wage/salary	43,690 (31.48)	41,468 (20.08)	47,509 (13.93)	50,482 (9.79)	8861 (0.90)	44,493 (16.37)
e) Non-farm business	12,005 (8.65)	9419 (4.56)	7919 (2.32)	7857 (1.52)	7172 (0.73)	9962 (3.66)
Total (a +b +c +d +e)	138,797 (100.00)	206,479 (100.00)	341,097 (100.00)	515,651 (100.00)	980,279 (100.00)	271,875 (100.00)

Source: Authors’ estimates from NSSO data

Source-wise distribution of per capita income into quintile groups

Table 4. Distribution of per capita income of farm households into quintile groups, Punjab

Quintiles	Income sources (%)					Average annual income (Rs/capita)
	Crops	Livestock	Casual wage	Regular wage and salary	Non-farm business
Bottom	80.97	−23.29	4.19	23.29	14.84	7461 (100.00)
Q2	53.70	13.98	2.71	19.86	9.75	25,902 (100.00)
Q3	83.09	11.38	0.51	1.80	3.22	44,165 (100.00)
Q4	77.35	8.66	-	11.88	2.11	70,824 (100.00)
Top	70.24	6.75	0.03	20.93	2.06	145,468 (100.00)
Overall	71.88	7.52	0.58	16.37	3.66	51,825 (100.00)

Source: Authors’ estimates from NSSO data

Figure 1. Distribution of farm households according to their income.

Table 5. Income inequality among farm households and its source-wise decomposition, Punjab

Income sources	Income share	Source Gini	Proportional contribution to Gini	Marginal contribution to Gini
Crops	0.820	0.534	0.824	0.005 (0.0147)
Livestock	0.101	0.641	0.052	−0.049 (0.0049)**
Casual wages	0.005	0.979	−0.005	−0.010 (0.0029)**
Regular wages and salary	0.085	0.929	0.099	0.014 (0.0110)
Non-farm business	0.027	0.961	0.023	−0.004 (0.0051)
Total income	-	0.482	-	-

Source: Authors’ estimates from NSSO data

Note: Bootstrapped standard errors with 1000 replications in parentheses,

**significant at the 1% level of significance

Table 6. Decomposition of income inequality within farm households across different farm size categories in Punjab

Farm size categories	Income sources	Income share	Source Gini	Proportional contribution to Gini	Marginal contribution to Gini
Marginal	Crops	0.393	0.570	0.278	−0.115 (0.048)*
	Livestock	0.263	0.716	0.267	0.004 (0.040)
	Casual wage	0.049	0.924	0.013	−0.036 (0.016)*
	Regular wage/salary	0.258	0.889	0.360	0.103 (0.051)*
	Non-farm business	0.077	0.928	0.070	−0.007 (0.020)
	Total income	-	0.498	-	-
Small	Crops	0.739	0.456	0.616	−0.123 (0.058)*
	Livestock	0.098	0.652	0.050	−0.048 (0.011)**
	Casual wage	0.004	0.988	-	−0.004 (0.007)
	Regular wage/salary	0.173	0.924	0.288	0.115 (0.045)*
	Non-farm business	0.048	0.944	0.060	0.012 (0.014)
	Total income	-	0.454	-	-
Semi-medium	Crops	0.854	0.379	0.754	−0.010 (0.046)
	Livestock	0.109	0.607	0.071	−0.038 (0.013)**
	Casual wage	0.001	0.994	−0.002	−0.002 (0.002)
	Regular wage/salary	0.064	0.944	0.115	0.052 (0.029)
	Non-farm business	0.014	0.978	0.022	0.008 (0.008)
	Total income	-	0.379	-	-
Medium	Crops	0.893	0.303	0.793	−0.100 (0.039)*
	Livestock	0.075	0.602	0.038	−0.037 (0.014)**
	Casual wage	0.001	0.992	−0.003	−0.004 (0.003)
	Regular wage/salary	0.041	0.936	0.083	0.042 (0.022)
	Non-farm business	0.022	0.972	0.059	0.036 (0.021)
	Total income	-	0.309	-	-
Large	Crops	0.934	0.403	0.933	−0.001 (0.016)
	Livestock	0.050	0.432	0.017	−0.033 (0.016)*
	Casual wage	-	-	-	-
	Regular wage/salary	0.014	0.925	0.027	0.013 (0.009)
	Non-farm business	0.010	0.950	0.016	0.006 (0.010)
	Total income	-	0.402	-	-

Source: Authors’ estimates from NSSO data

Note: Bootstrapped standard errors with 1000 replications in parentheses

**significant at the 1% level of significance

* significant at the 5% level of significance

Table 7. Descriptive statistics of the variables used in regression

Variables	Mean	Standard deviation
Operational holding size (ha)	3.18	3.38
Leased-in land (proportion in land possessed)	0.18	0.30
Total workers (age 15–59) (no.)	3.63	1.70
Female workers (proportion in total workers)	0.47	0.17
Household head age (years)	54.76	13.82
Household head gender (male)	0.94	0.24
Access to institutional credit (proportion in total)	0.60	0.49
Education
Illiterate (proportion in total)	0.33	0.47
Up to middle (proportion in total)	0.35	0.48
Secondary or higher secondary (proportion in total)	0.27	0.44
Graduate or above (proportion in total)	0.06	0.23

Table 8. The regression estimates for determinants of income share

Explanatory variables	Crops			Livestock			Wages			Salary			Non-farm business
	Coefficient	t-stat	p-value	Coefficient	t-stat	p-value	Coefficient	t-stat	p-value	Coefficient	t-stat	p-value	Coefficient	t-stat	p-value
Constant	0.066	4.81	0.000	1.228	81.94	0.000	−1.009	−163.8	0.000	0.630	122.1	0.000	−0.066	−7.40	0.000
Landholding size (ha)	0.050	65.59	0.000	−0.016	−21.17	0.000	−0.083	−48.43	0.000	−0.037	−129.6	0.000	−0.068	−118.9	0.000
Proportion of leased-in land	−0.072	−10.51	0.000	−0.071	−10.13	0.000	0.133	41.28	0.000	0.257	109.3	0.000	−0.105	−23.73	0.000
Total workers (no.)	−0.029	−12.54	0.000	−0.043	−17.78	0.000	0.035	−23.43	0.000	−0.031	−32.86	0.000	0.051	34.36	0.000
Proportion of female workers in total workers	0.006	1.64	0.102	0.046	11.68	0.000	0.503	115.7	0.000	0.141	100.1	0.000	−0.077	−32.18	0.000
Household head age (years)	0.008	52.97	0.000	−0.012	−71.71	0.000	0.005	71.54	0.000	−0.002	−38.24	0.000	0.005	57.33	0.000
Household head gender (male =1 otherwise =0)	0.055	6.58	0.000	−0.145	−16.10	0.000	-	-	-	−0.123	−39.29	0.000	0.227	52.66	0.000
Access to institutional credit (availed =1 otherwise =0)	0.259	62.94	0.000	−0.247	−57.07	0.000	0.178	81.68	0.000	−0.051	−33.27	0.000	−0.020	−7.89	0.000
Education
Up to middle (up to middle =1 otherwise =0)	0.153	31.23	0.000	−0.362	−71.44	0.000	1.024	326.9	0.000	0.044	24.17	0.000	0.262	94.79	0.000
Secondary or higher secondary (secondary or higher secondary = 1, otherwise = 0)	−0.053	−10.36	0.000	−0.011	−2.13	0.033	0.912	283.2	0.000	0.181	98.52	0.000	−0.022	−7.03	0.000
Graduate or above (graduate or above =1 otherwise =0)	−0.073	−7.02	0.514	−0.147	−12.75	0.000	-	-	-	0.182	58.49	0.000	−0.019	−2.41	0.016