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The consumption, income, and wealth of the poorest: An empirical analysis of economic inequality in rural and urban Sub-Saharan Africa for macroeconomists

Research output: Contribution to journalArticle

Original languageEnglish
Pages (from-to)350-371
Number of pages22
JournalJournal of Development Economics
Volume134
Early online date15 Jun 2018
DOIs
DateAccepted/In press - 10 May 2018
DateE-pub ahead of print - 15 Jun 2018
DatePublished (current) - 1 Sep 2018

Abstract

We provide new empirical insights on the joint distribution of consumption, income, and wealth using cross-sectional and panel household-survey data from three of the poorest countries in the world—Malawi, Tanzania, and Uganda—all located in Sub-Saharan Africa (SSA). Our main contribution is to establish the co-existence of two phenomena in SSA: (i) a low transmission from income inequality to wealth inequality (i.e., low accumulation); and (ii) a low transmission from income inequality to consumption inequality (i.e., high consumption insurance). The variation between rural and urban areas in SSA—and between SSA and the United States of America—reveals a negative relationship, and potentially, a trade-off between accumulation and consumption insurance.

    Research areas

  • Accumulation, Consumption, Cross-sectional data, Income, Inequality, Insurance, Macroeconomy, Panel data, Sub-Saharan Africa, Wealth, poverty

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  • Full-text PDF (accepted author manuscript)

    Rights statement: This is the author accepted manuscript (AAM). The final published version (version of record) is available online via Elsevier at https://www.sciencedirect.com/science/article/pii/S0304387818305017 . Please refer to any applicable terms of use of the publisher.

    Accepted author manuscript, 1 MB, PDF-document

    Embargo ends: 15/06/20

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    Licence: CC BY-NC-ND

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