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

Leandro De Magalhães, Raül Santaeulàlia-Llopis*

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

19 Citations (Scopus)
46 Downloads (Pure)

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.

Original languageEnglish
Pages (from-to)350-371
Number of pages22
JournalJournal of Development Economics
Volume134
Early online date15 Jun 2018
DOIs
Publication statusPublished - 1 Sep 2018

Structured keywords

  • ECON Applied Economics
  • ECON Macroeconomics

Keywords

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

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