TY - JOUR
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
N1 - Funding Information:
We thank Kathleen Beegle, Taryn Dinkelman, Pascaline Dupas, Francisco Ferreira, Doug Gollin, John Kaboski, Talip Kilic, Kurt Mitman and Jon Temple for their comments and suggestions at different stages of this project. We thank the seminar participants at the SED in Toronto 2014, the World Bank LSMS group in 2015, Econometric Society World Congress in Montréal 2015, European Economic Association Meetings in Geneva 2016 and Lisbon 2017, Universidad de Zaragoza 2017, Universitat Autònoma de Barcelona 2017, and University of Bristol 2017. We thank Kurt Mitman for kindly providing U.S. with his PSID data. We also thank Huikang Ying and Stefano Pica for their assistance on the newest panel waves for Malawi and Uganda, respectively. Raül Santaeulàlia-Llopis thanks the ERC AdG-GA324048 Asset Prices and Macro Policy when Agents Learn (APMPAL) and the Spanish Ministry of Economy and Competitiveness through the Severo Ochoa Programme for Centers of Excellence in R&D (SEV-2015-0563) for their financial support.
Publisher Copyright:
© 2018 Elsevier B.V.
PY - 2018/9
Y1 - 2018/9
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
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U2 - 10.1016/j.jdeveco.2018.05.014
DO - 10.1016/j.jdeveco.2018.05.014
M3 - Article
AN - SCOPUS:85048710299
SN - 0304-3878
VL - 134
SP - 350
EP - 371
JO - Journal of Development Economics
JF - Journal of Development Economics
ER -