Income Diversification and Inequality in Mountainous Regions: A Descriptive Study of Sherani (Pakistan)

Income diversification serves as a buffer against shocks, whereas income inequality hinders the equitable distribution of resources. These two phenomena are not examined among the dwellers of the mountains in Baluchistan. Thus, the objective of this study is to empirically analyse income diversification and inequality in Sherani, a district that lies within the Sulaiman Mountain range. Using a structured questionnaire, primary data were collected from 160 households through in-person interviews. To analyse income diversification, the Simpson Diversity Index is calculated. For measuring inequality among farm and non-farm sources of income, the Gini Coefficient, Percentile Ratios, the Generalised Entropy Index, and the Atkinson Index are computed. The results reveal that, on average, the annual contribution of foreign remittances and agriculture to a household's income is 46% and 27%, respectively. The level of diversification stands at 0.48, which is moderate. The results further indicate that the Gini Coefficient is 0.49 for farm income and 0.31 for non-farm income, showing considerably higher inequality in the former. The government should give special attention to the households' diversification efforts to increase their income and reduce inequality.