Zakat and inequality: some evidence from Pakistan

Utilizing evidence from the period 1987-88, two different models of Pakistani income distribution are set up--one that takes into account the payment and receipt of zaka, and one that presents income distribution as it would have been without the practice of zaka. The analysis, featuring Atkinson-Kolm-Sen relative indices, concludes that the practice of zaka does in fact lessen the degree of income inequality in the country. The degree to which inequality is lessened is not great, however. Through the practice of zaka inequality lessened both between the country's provinces and within individual provinces.