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Working Paper

The Consumption, Income, and Wealth of the Poorest : Cross-Sectional Facts of Rural and Urban Sub-Saharan Africa for Macroeconomists

LIVING STANDARDS PER CAPITA CONSUMPTION FORECASTS RISKS HOUSEHOLD SIZE HOUSEHOLD SURVEY ECONOMIC GROWTH PRODUCTION VALUATION DISPOSABLE INCOME FOOD CONSUMPTION INCOME CONSUMPTION BEHAVIOR AGRICULTURAL PRODUCTION CONSUMPTION INSURANCE INTEREST RATE PROPERTY RIGHTS COUNTERFACTUAL POLITICAL ECONOMY DEATH PORTFOLIO WELFARE RURAL CREDIT INCENTIVES DISTRIBUTION VARIABLES INCOME GAP INPUTS PAYMENTS WEALTH RURAL POPULATION CALORIC INTAKE MEASURES SAFETY NETS DEVELOPMENT LAND LAW RURAL POPULATIONS SAVINGS RURAL HOUSEHOLD COSTS RURAL HOUSEHOLDS DEVELOPMENT ECONOMICS HOUSEHOLD HEAD RURAL INCOME RENT FOOD PRICE INEQUALITY MEASURES INCOME INEQUALITY EXCHANGE RATES INDUSTRIALIZATION TRANSFERS DEBT HOUSEHOLD COMPOSITION HOUSEHOLD INCOME HOUSEHOLD SURVEYS LOTTERY SOCIAL SECURITY CALORIE INTAKE FARMERS RISK SHARING LAND DISTRIBUTION LAND VALUE RURAL MIGRANTS HOUSEHOLD HEADS FOOD PRODUCTION ECONOMIC RESEARCH FOOD ITEMS ALTERNATIVE USE INCOME MEASURES RURAL GAP EQUILIBRIUM ANALYSIS CONSUMPTION AGRICULTURAL SHOCKS SOCIAL SAFETY NETS HUMAN CAPITAL FOOD SECURITY RURAL COUNTERPARTS CAPITAL WAGES RURAL MIGRATION VALUE LAND QUALITY RURAL AREA CREDIT MACROECONOMICS FARM ACTIVITIES POOR COUNTRIES CONSUMER PRICE INDEXES INCOME DISTRIBUTION RURAL SETTINGS AGRICULTURE AGRICULTURAL LAND GROWTH MODELS RURAL MEASUREMENT SHARES FARM WORK ASSETS PUBLIC WORKS FOOD TRANSFERS BENCHMARK IDIOSYNCRATIC SHOCKS AGRICULTURAL INPUTS ECONOMIC INEQUALITY INSURANCE RURAL RESIDENTS TRADE CONSUMPTION SMOOTHING THEORY FOOD SHARE GENERAL EQUILIBRIUM ANALYSIS GROWTH RATE RURAL AREAS POVERTY CREDIT MARKET CONSTRAINTS HOUSEHOLD CONSUMPTION INFORMAL INSURANCE HUMAN CAPITAL INVESTMENT SUBSISTENCE ECONOMY UNDERESTIMATES POOR INCOME QUINTILE PRICE INDEXES INHERITANCE FOOD PRICES OUTCOMES CONSUMPTION INCREASES MIDDLE INCOME COUNTRIES PRICES ECONOMIC STATISTICS PRODUCTION COSTS DEVELOPMENT POLICY INCOME GROUPS INEQUALITY POOR HOUSEHOLDS
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World Bank, Washington, DC
Africa | Malawi | Tanzania | Uganda
2015-07-17T19:06:52Z | 2015-07-17T19:06:52Z | 2015-06

This paper provides new empirical insights on the joint distribution of consumption, income, and wealth in three of the poorest countries in the world — Malawi, Tanzania, and Uganda — all located in Sub-Saharan Africa (SSA). The first finding is that while income inequality is similar to that of the United States (US), wealth inequality is barely one-third that of the US. Similarly, while the top of the income distribution (1 and 10 percent) earns a similar share of total income in SSA as in the US, the share of total wealth accumulated by the income-rich in SSA is one-fifth of its US counterpart. The main contributions of the paper are to document: (i) this dwarfed transmission from income to wealth, which suggests that SSA households face a larger inability to save and accumulate wealth compared with US households; and (ii) a lower transmission from income to consumption inequality, which suggests the presence of powerful institutions that favor consumption insurance to the detriment of saving. These features are more relevant for rural areas, which represent roughly four-fifths of the total population. The paper identifies the few successful pockets of the SSA population that are able to accumulate wealth by exploring sources of inequality such as age, education, migration, borrowing ability, and societal systems.

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