Vol.:(0123456789) Journal of Quantitative Economics https://doi.org/10.1007/s40953-019-00154-2 1 3 ORIGINAL ARTICLE Zakat and Poverty Alleviation in Tunisia Using the Fuzzy Approach Mejda Bouanani 1  · Besma Belhadj 1 © The Indian Econometric Society 2019 Abstract Zakat is one of the fve pillars of Islam, which is compulsory to all the well-of Mus- lims, and it is given to the needy. It is used to fght poverty. This study examines Zakat’s impact on poverty in Tunisia. Using simulated data of individual well-being from Tunisian household survey in 2010, the potential importance of the Zakat to struggle with poverty is highlighted. Fuzzy Poverty Measurement is computed which shows that Zakat does reduce this measurement. The simulation results dis- play a signifcant decrease of the poverty index of Tunisia’s seven regions, and pov- erty can be eradicated under cases West regions. Keywords Fuzzy poverty measurement · Zakat · Poverty alleviation JEL Classifcation C00 · Z12 · I32 Introduction Islam constitutes the world’s second largest religious group with nearly 2 billion Muslim populations. While Zakat is compulsory on Muslims fulflling Nisab, 1 dur- ing contemporary times, it is considered to be voluntary, and this, in part, explains its reduced amounts and its low contribution in the majority of the Muslim nations’ socio-economic systems due to their reluctance regarding the collection of Zakat. Indeed, around 35% of poor in the world are from Muslim world (World Bank 2010). Pryor (2007) explains, in the analysis of Muslim economies, religion does * Mejda Bouanani mejda.bounanani@gmail.com Besma Belhadj besma.kaabi@isg.rnu.tn 1 Econometrics Applied to Finance and FSEGT, University of Tunis El Manar, Tunis, Tunisia 1 Nisab is the minimum amount for a Muslim net worth to be obligated to give Zakat and it is considered to governmentally determined poverty threshold.