Sources of Income Inequality among Rural Farm Households in North Western Himalayas

Abstract

Study assesses the inequality arising from variations of economic opportunities across different agro-climatic zones of Himachal Pradesh. The poor in the state tends to diversify their income portfolio towards wages and salaries. Income from wages and salaries is most equally distributed, yet it contributes maximum (43.63%) in total inequality. The high Gini correlation of wages and salaries with total income (R =0.597), showing that households which are above in the total income stratum derive more income from wages and salaries activities, also k contributed its share (43.63%) in total inequality. Wages and salaries and livestock inequalities are increasing in its effect; other factors remaining constant. One per cent increase in income from wages and salaries and livestock, increased total inequality by 0.115 and 0.140 per cent. The income from agriculture and livestock tend to significantly reduce income inequality in the state. However, agriculture is the major income source across all Zones showed a wide disparity among the share of other sources in the total income. Income of households was more unevenly distributed in the Zone-II, and Gini index for the Zone-II (G =0.231) was higher than that of the Zone-IV, Zone-III and Zone-I of k the state. The result of the Theil index emphasized within group inequality was the key contributor to overall disparity across agro-climatic zones. Therefore, Policy intervention at zonal level would be imperative for correcting spatial imbalances in income distribution among agricultural households of Himachal Pradesh, and would cover the way for their comprehensive and more unbiased development.