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The Consumption, Income, and Wealth of the Poorest : Cross-Sectional Facts of Rural and Urban Sub-Saharan Africa for Macroeconomists

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World Bank (WB)

Abstract: This paper provides new empirical insights on the joint distribution of consumption, income, and wealth in three of the poorest countries in the world — Malawi, Tanzania, and Uganda — all located in Sub-Saharan Africa (SSA). The first finding is that while income inequality is similar to that of the United States (US), wealth inequality is barely one-third that of the US. Similarly, while the top of the income distribution (1 and 10 percent) earns a similar share of total income in SSA as in the US, the share of total wealth accumulated by the income-rich in SSA is one-fifth of its US counterpart. The main contributions of the paper are to document: (i) this dwarfed transmission from income to wealth, which suggests that SSA households face a larger inability to save and accumulate wealth compared with US households; and (ii) a lower transmission from income to consumption inequality, which suggests the presence of powerful institutions that favor consumption insurance to the detriment of saving. These features are more relevant for rural areas, which represent roughly four-fifths of the total population. The paper identifies the few successful pockets of the SSA population that are able to accumulate wealth by exploring sources of inequality such as age, education, migration, borrowing ability, and societal systems.
Type: Working Paper
Publications & Research
Publications & Research :: Policy Research Working Paper
Link: http://hdl.handle.net/10986/22218
Subject: LIVING STANDARDS
PER CAPITA CONSUMPTION
FORECASTS
RISKS
HOUSEHOLD SIZE
HOUSEHOLD SURVEY
ECONOMIC GROWTH
PRODUCTION
VALUATION
DISPOSABLE INCOME
FOOD CONSUMPTION
INCOME
CONSUMPTION BEHAVIOR
AGRICULTURAL PRODUCTION
CONSUMPTION INSURANCE
INTEREST RATE
PROPERTY RIGHTS
COUNTERFACTUAL
POLITICAL ECONOMY
DEATH
PORTFOLIO
WELFARE
RURAL CREDIT
INCENTIVES
DISTRIBUTION
VARIABLES
INCOME GAP
INPUTS
PAYMENTS
WEALTH
RURAL POPULATION
CALORIC INTAKE
MEASURES
SAFETY NETS
DEVELOPMENT
LAND LAW
RURAL POPULATIONS
SAVINGS
RURAL HOUSEHOLD
COSTS
RURAL HOUSEHOLDS
DEVELOPMENT ECONOMICS
HOUSEHOLD HEAD
RURAL INCOME
RENT
FOOD PRICE
INEQUALITY MEASURES
INCOME INEQUALITY
EXCHANGE RATES
INDUSTRIALIZATION
TRANSFERS
DEBT
HOUSEHOLD COMPOSITION
HOUSEHOLD INCOME
HOUSEHOLD SURVEYS
LOTTERY
SOCIAL SECURITY
CALORIE INTAKE
FARMERS
RISK SHARING
LAND DISTRIBUTION
LAND VALUE
RURAL MIGRANTS
HOUSEHOLD HEADS
FOOD PRODUCTION
ECONOMIC RESEARCH
FOOD ITEMS
ALTERNATIVE USE
INCOME MEASURES
RURAL GAP
EQUILIBRIUM ANALYSIS
CONSUMPTION
AGRICULTURAL SHOCKS
SOCIAL SAFETY NETS
HUMAN CAPITAL
FOOD SECURITY
RURAL COUNTERPARTS
CAPITAL
WAGES
RURAL MIGRATION
VALUE
LAND QUALITY
RURAL AREA
CREDIT
MACROECONOMICS
FARM ACTIVITIES
POOR COUNTRIES
CONSUMER PRICE INDEXES
INCOME DISTRIBUTION
RURAL SETTINGS
AGRICULTURE
AGRICULTURAL LAND
GROWTH MODELS
RURAL
MEASUREMENT
SHARES
FARM WORK
ASSETS
PUBLIC WORKS
FOOD TRANSFERS
BENCHMARK
IDIOSYNCRATIC SHOCKS
AGRICULTURAL INPUTS
ECONOMIC INEQUALITY
INSURANCE
RURAL RESIDENTS
TRADE
CONSUMPTION SMOOTHING
THEORY
FOOD SHARE
GENERAL EQUILIBRIUM ANALYSIS
GROWTH RATE
RURAL AREAS
POVERTY
CREDIT MARKET CONSTRAINTS
HOUSEHOLD CONSUMPTION
INFORMAL INSURANCE
HUMAN CAPITAL INVESTMENT
SUBSISTENCE ECONOMY
UNDERESTIMATES
POOR
INCOME QUINTILE
PRICE INDEXES
INHERITANCE
FOOD PRICES
OUTCOMES
CONSUMPTION INCREASES
MIDDLE INCOME COUNTRIES
PRICES
ECONOMIC STATISTICS
PRODUCTION COSTS
DEVELOPMENT POLICY
INCOME GROUPS
INEQUALITY
POOR HOUSEHOLDS




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