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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

Leandro De Magalhães and Raul Santaeulalia-Llopis

Journal of Development Economics, 2018, vol. 134, issue C, 350-371

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: Macroeconomy; Consumption; Income; Wealth; Sub-Saharan Africa; Inequality; Cross-sectional data; Panel data; Accumulation; Insurance (search for similar items in EconPapers)
JEL-codes: O10 O55 I32 E21 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: The Consumption, Income, and Wealth of the Poorest: An Empirical Analysis of Economic Inequality in Rural and Urban Sub-Saharan Africa for Macroeconomists (2018) Downloads
Working Paper: The Consumption, Income, and Wealth of the Poorest: An Empirical Analysis of Economic Inequality in Rural and Urban Sub-Saharan Africa for Macroeconomists (2017) Downloads
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