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An African Growth Miracle? Or: What do Asset Indices Tell Us about Trends in Economic Performance?

Kenneth Harttgen, Stephan Klasen and Sebastian Vollmer
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Sebastian Vollmer: University of Hannover

No 109, Courant Research Centre: Poverty, Equity and Growth - Discussion Papers from Courant Research Centre PEG

Abstract: Using changes in the possession of household assets over the past 20 years, several recent papers have argued that economic performance in Arica was substantially better than suggested by national income data and income poverty statistics, who suffer from well-known weaknesses. We scrutinize these claims and first argue that trends in assets provide biased proxies for trends in incomes or consumption. In particular we show that the relationship between growth in assets and growth in incomes or consumption is extremely weak; instead, we find evidence of asset drift using macro and micro data, which is consistent with the claims we make about possible biases in the use of asset indices. As a result, we find no evidence supporting the claim of an African growth miracle that extends beyond what has been reported in GDP/capita and consumption figures.

Keywords: Asset index; GDP growth; Africa (search for similar items in EconPapers)
JEL-codes: O47 O11 O12 (search for similar items in EconPapers)
Date: 2012-02-16
New Economics Papers: this item is included in nep-afr
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Journal Article: An African Growth Miracle? Or: What do Asset Indices Tell Us About Trends in Economic Performance? (2013) Downloads
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