Inter and Intra-Regional Income Inequalities Attributable to Spatial Concentration in Pakistan

Tabassum Uzma () and Nazeer Munazah
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Tabassum Uzma: Applied Economics Research Centre, University of Karachi, Karachi, Pakistan.
Nazeer Munazah: Applied Economics Research Centre, University of Karachi, Karachi, Pakistan.

Zagreb International Review of Economics and Business, 2025, vol. 28, issue 1, 103-124

Abstract: Reducing inequality is essential to sustainable growth in regions. Due to varying geographic locations and locally formed development strategies, agglomeration disparities fluctuate among urban areas. This study is uniquely designed to measure the extent to which spatial agglomeration impairs inter and intra inequalities using two distinct techniques, Geographic Information System (GIS) and Propensity Score Matching (PSM). The results obtained from both analyses are in line with the theoretical framework established in the study. The results show that income growth is significantly impacted by the geographical concentration of industries. After matching, agglomerated regions have 22.5% higher average income than less agglomerated areas, which upsurges inter-regional disparities. Additionally, as income growth is unevenly distributed among inhabitants of the same region, inequalities in a treated regions are estimated to increase by approximately 2.5% more in comparison to the untreated regions that are relatively less concentrated, exacerbating intra-regional inequality.

Keywords: Income inequality; urban regions; Propensity Score Matching; Arc GIS (search for similar items in EconPapers)
JEL-codes: C31 D30 R12 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:zirebs:v:28:y:2025:i:1:p:103-124:n:1005

DOI: 10.2478/zireb-2025-0005

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