Household income plays an important role in increasing the economic wellbeing of households. This study investigates the impact of tolerance on household income which is used as a proxy of economic wellbeing in district Peshawar. The impact of other socioeconomic variables such as family size, level of education, gender, age, dependency ratio, native/immigrant and place of residence of the household is also assessed. The study is based on primary data of 384 households. A well-structured questionnaire is used to collect data from the households in district of Peshawar using three stage sampling technique. Tolerance is measured as a composite index named as Household Tolerance Index (HTI) consisting of 20 items constructed through Principal Component Analysis (PCA). Ordinary Least Squares Method with robust standard errors is applied for the estimation of results. The conclusion of the study show that HTI significantly and positively affect Household Income in district Peshawar. Findings also reveal a positive association between household size, level of education, gender and Household Income. While a negative association is found between the dependency ratio and Household Income. Thus the positive consequences of tolerance can be achieved through inculcating tolerant behavior in the society. In this regard media, Religious and Educational institutions and parents while raising their off springs can engineer the tolerance in the society which will lead to higher living standards. Supervisor:- Dr Wasim Shahid Malik