Measurement and Sources of Income Inequality among Rural and Urban Households in Nigeria

Abayomi Oyekale (), Adetola Ibidunni Adeoti and Tolulope Olayemi Oyekale

Working Papers PMMA from PEP-PMMA

Abstract: Income inequality and poverty are closely related. This study decomposed income inequality in Nigeria using the Gini-decomposition, regression-based and Shapley approaches. Results show that in 2004, income inequality is higher in rural areas than in urban areas. The study also noted that employment income increases inequality while agricultural income decreases inequality. Factors suchs as urbanization, residence in the southwest zone, household size, the house head's formal education, number of time suffered from illness, engagement in a paid job, involvement in a non-farm business, formal credit and informal credit contributed to the increased income inequality. Between 1998 and 2004, income redistribution and income growth increased poverty. The study recommended that welfare enhancing programs that will benefit urban/rural poor should be identified, while better economic opportunities should be created for those in rural areas.

Keywords: Income inequality; poverty; decomposition; economic opportunities; Nigeria (search for similar items in EconPapers)
JEL-codes: D3 O15 O55 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-afr, nep-agr and nep-dev
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:lvl:pmmacr:2006-20

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