Effect of gold mining on income distribution in Ghana

George Adu, Franklin Amuakwa-Mensah, George Marbuah and Justice Mensah ()

No 2016.23, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: This paper examined the effect of mining on household income and welfare and how such effects are distributed over different quantiles of income and welfare. Using the three most recent rounds of the Ghana Living Standards Surveys together with information on the location of gold mines during the survey years, we estimated effects of living in a mining area on real gross income, employment income, and real per capita household expenditure (a proxy for welfare) using average and quantile treatment effect models. We find robust evidence of negative effect of mining on household income and welfare. Our results also indicate that the income reducing effect of mining activity falls heavily on households at bottom of the income distribution. In the case of household welfare, the interesting revelation from our result is that the negative effect of mining falls largely on both the lower and upper ends of the welfare distribution, with much heavier burden at the lower relative to the upper tail. Our paper, thus, provides ample evidence that mining activity does not only reduce income and welfare, but further increases inequality in the distribution of income and welfare.

Keywords: Gold mining; Income and welfare distribution; Quantile treatment effect; Ghana (search for similar items in EconPapers)
JEL-codes: C31 O13 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016-07
New Economics Papers: this item is included in nep-afr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2016.23

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