Aspirations in Rural Pakistan: An Empirical Analysis(2012)
AbstractTo aspire means “to seek to attain or accomplish a particular goal” (Merriam-Webster 2012). Aspirations play an important role in everyday decision-making (Camerer et al. 1997). They help determine whether individuals make investments to better themselves economically and socially (Maertens 2012) and whether they engage in potentially profitable economic risk-taking (Mo 2012). As such, policies that raise aspirations can play a vital role in poverty reduction strategies. This report examines four important questions related to aspirations in rural Pakistan: 1. How high are average aspirations levels in rural Pakistan, and how do they vary across different types of individuals and households? 2. What external and internal factors, including cognitive processes, help shape aspirations? 3. What policies or community institutions might raise aspirations levels? 4. What are potential benefits associated with raising aspirations levels? Understanding what leads rural Pakistanis to aspire or fail to aspire is especially important given that Pakistan has an extremely young population that will need to find employment in the coming years (Nayab 2006). Pakistan has a quarter of its population under the age of 10 and 59% under the age of 25 (PRHS 2012). It also has the world’s fifth-largest population of 15-25 year olds (Bloom 2012). For rural populations highly dependent on agriculture, one consequence of high fertility is increasingly smaller average farm sizes, as family land assets become further divided. This problem is especially acute among the poor; in rural areas, the poorest per capita expenditure quintile has 4.0 children under the age of 15, whereas the richest has 1.2 children (PRHS 2012). As Pakistan’s working-age population grows, it is vitally important to understand what drives individuals to aspire to improve their outcomes and to invest in their future. To examine aspirations in rural Pakistan, we carried out an aspirations module with almost 5,000 individuals as part of a comprehensive household survey. Using respondents’ answers to questions about their aspirations in four dimensions (income, wealth, education, and social status), we constructed an index similar to those used by Beaman et al. (2012) and Bernard and Seyoum Taffesse (2012) to measure aspirations levels. Specifically, respondents were asked to report the level of personal income they would like to achieve, the level (value) of assets they would like to achieve, the level of education they would like a child of their same gender to achieve (re-coded as desired years of education), and the level of social status they would like to achieve (on a 10-step ladder of possibilities). An individual’s index score is increasing in their desired levels of achievement in these four dimensions. The weight given to each dimension varies by individual, and equals the share of importance they assign to that dimension. To standardize aspirations levels, we measure each individual’s aspirations level compared to the average aspirations of individuals in the same district. This allows us to investigate the factors that can explain within-district differences in aspirations levels. In short, why do some individuals aspire to achieve more or less than do others from the same district? An individual’s aspirations level is determined by various external and internal economic, social, cultural, psychological, demographic, and political factors (Appadurai 2004; Ray 2006). We first examine these factors, and show that very large numbers of rural Pakistanis feel they lack access to basic services and institutions that might influence aspirations. These include security, justice, and social safety nets, among others. Further, women and the poor feel they have even less access to these services than do men and the more well-off. Most respondents also live in communities lacking important infrastructure that has been shown in other contexts to boost economic growth. In particular, over a third live in villages without organized village meetings to discuss village affairs, only 16% have a railway station within walking distance, and 52% indicate that most of their village’s internal roads are made of mud. On an internal, cognitive level, individuals generally feel that they have little control over what happens in their lives. In particular, individuals were more likely to disagree than agree that they have control over what happens in their life. We next examine the characteristics that individuals and households with high aspirations levels share. Among other findings, we show that women have lower aspirations than men; the uneducated have lower aspirations than those with some education; the middle-aged (25-45) have lower aspirations than the young (age 18-25); and agricultural wage laborers have lower aspirations than rural non-farm workers. We also find that various internal factors are strongly correlated with aspirations levels, including an internal locus of control, self-esteem, religiosity, trust, envy, and a sense of poverty being due to external factors. This suggests some particular groups that are most at risk for aspirations failures, and that might be specifically targeted by policies aimed at raising aspirations. Next, we quantify the relationship between aspirations and individuals’ economic decisions and outcomes in several ways. We show that higher aspirations are associated with higher crop yields, less pre- and post-harvest loss, more savings, more cash loans (likely indicating greater access to and use of credit), and a greater propensity to operate a non-agricultural enterprise. This provides initial evidence that aspirations have real economic effects on the poor, and merit further analysis. These findings have important policy implications. Good policy creates and cultivates the institutional conditions that permit and encourage individuals to aspire. We identify a number of potential policy levers associated with higher aspirations in rural Pakistan: holding organized meetings of village residents, improving the justice system, upgrading road surfaces (from mud to other types), expanding communication and transport links with other localities, and providing training of some type through NGOs. While our research uncovers important associations between individual and community characteristics and aspirations, we are not able to pinpoint the direction of causality. Our results are suggestive, but further research is needed to understand the causal mechanisms at work. The literature on aspirations formation and the effects of aspirations is still very new. The report concludes with a number of promising directions for future work: the use of motivational experiments to exogenously raise aspirations levels (already being studied and used to influence policy in Ethiopia), the study of the effects of climate change and natural disasters on aspirations, and the use of governance experiments to explore policies that can effectively raise aspirations.
- Rural Poverty
Publication DateDecember, 2012
Citation InformationKatrina Kosec, Madeeha Hameed and Stephanie Hausladen. "Aspirations in Rural Pakistan: An Empirical Analysis" (2012)
Available at: http://works.bepress.com/katrina_kosec/20/