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

doi:10.1016/j.jdeveco.2018.05.014

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 journal › Article (Academic Journal) › peer-review

42 Citations (Scopus)

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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 language	English
Pages (from-to)	350-371
Number of pages	22
Journal	Journal of Development Economics
Volume	134
Early online date	15 Jun 2018
DOIs	https://doi.org/10.1016/j.jdeveco.2018.05.014
Publication status	Published - 1 Sept 2018

Research Groups and Themes

ECON Applied Economics
ECON Macroeconomics

Keywords

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

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jdeveco.2018.05.014

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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, 1.7 MBLicence: CC BY-NC-ND

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

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.",

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

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year = "2018",

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doi = "10.1016/j.jdeveco.2018.05.014",

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volume = "134",

pages = "350--371",

journal = "Journal of Development Economics",

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T1 - The consumption, income, and wealth of the poorest

T2 - An empirical analysis of economic inequality in rural and urban Sub-Saharan Africa for macroeconomists

AU - De Magalhães, Leandro

AU - Santaeulàlia-Llopis, Raül

PY - 2018/9/1

Y1 - 2018/9/1

N2 - 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.

AB - 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.

KW - Accumulation

KW - Consumption

KW - Cross-sectional data

KW - Income

KW - Inequality

KW - Insurance

KW - Macroeconomy

KW - Panel data

KW - Sub-Saharan Africa

KW - Wealth

KW - poverty

UR - http://www.scopus.com/inward/record.url?scp=85048710299&partnerID=8YFLogxK

U2 - 10.1016/j.jdeveco.2018.05.014

DO - 10.1016/j.jdeveco.2018.05.014

M3 - Article (Academic Journal)

AN - SCOPUS:85048710299

SN - 0304-3878

VL - 134

SP - 350

EP - 371

JO - Journal of Development Economics

JF - Journal of Development Economics

ER -

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

Abstract

Research Groups and Themes

Keywords

UN SDGs

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Dr Leandro M De Magalhaes

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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

Abstract

Research Groups and Themes

Keywords

UN SDGs

Access to Document

Handle.net

Other files and links

Fingerprint

Profiles

Dr Leandro M De Magalhaes

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