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

Author

Listed:
  • Kenneth Harttgen

    (University of Zürich, Nadel)

  • Stephan Klasen

    (Georg-August-University Göttingen)

  • Sebastian Vollmer

    (University of Hannover)

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.

Suggested Citation

  • Kenneth Harttgen & Stephan Klasen & Sebastian Vollmer, 2012. "An African Growth Miracle? Or: What do Asset Indices Tell Us about Trends in Economic Performance?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 109, Courant Research Centre PEG.
  • Handle: RePEc:got:gotcrc:109
    as

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    References listed on IDEAS

    as
    1. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521725200, December.
    2. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521898010, December.
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    4. Filmer, Deon*Pritchett, Lant, 1998. "Estimating wealth effects without expenditure data - or tears : with an application to educational enrollments in states of India," Policy Research Working Paper Series 1994, The World Bank.
    5. Harttgen, Kenneth & Klasen, Stephan, 2012. "A Household-Based Human Development Index," World Development, Elsevier, vol. 40(5), pages 878-899.
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    8. Sahn, David E. & Stifel, David C., 2000. "Poverty Comparisons Over Time and Across Countries in Africa," World Development, Elsevier, vol. 28(12), pages 2123-2155, December.
    9. Deon Filmer & Kinnon Scott, 2012. "Assessing Asset Indices," Demography, Springer;Population Association of America (PAA), vol. 49(1), pages 359-392, February.
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    11. Deon Filmer & Lant Pritchett, 2001. "Estimating Wealth Effects Without Expenditure Data—Or Tears: An Application To Educational Enrollments In States Of India," Demography, Springer;Population Association of America (PAA), vol. 38(1), pages 115-132, February.
    12. David Stifel & Luc Christiaensen, 2007. "Tracking Poverty Over Time in the Absence of Comparable Consumption Data," World Bank Economic Review, World Bank Group, vol. 21(2), pages 317-341, June.
    13. Xavier Sala-i-Martin & Maxim Pinkovskiy, 2010. "African Poverty is Falling...Much Faster than You Think!," NBER Working Papers 15775, National Bureau of Economic Research, Inc.
    14. David McKenzie, 2005. "Measuring inequality with asset indicators," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(2), pages 229-260, June.
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    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Has the African Growth Miracle Already Happened?
      by Shanta in Africa Can End Poverty on 2013-01-15 22:55:48
    2. Miraculous growth in Africa?
      by ? in G-FEED on 2014-05-14 02:39:00

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    Cited by:

    1. repec:eme:reinzz:s1049-258520150000023008 is not listed on IDEAS
    2. Sudhir Anand & Paul Segal, 2014. "The Global Distribution of Income," Economics Series Working Papers 714, University of Oxford, Department of Economics.
    3. Lange, Simon & Klasen, Stephan, 2017. "How the New International Goal for Child Mortality is Unfair to Sub-Saharan Africa (Again)," World Development, Elsevier, vol. 90(C), pages 128-146.
    4. Paul Mosley, 2013. "Two Africas? Why Africa’s ‘Growth Miracle’ is barely reducing poverty," Brooks World Poverty Institute Working Paper Series 19113, BWPI, The University of Manchester.
    5. Jolliffe,Dean Mitchell & Dang,Hai-Anh H. & Carletto,Calogero & Dang,Hai-Anh H. & Jolliffe,Dean Mitchell & Carletto,Calogero, 2017. "Data gaps, data incomparability, and data imputation : a review of poverty measurement methods for data-scarce environments," Policy Research Working Paper Series 8282, The World Bank.
    6. Ahmed, Faizuddin & Dorji, Cheku & Takamatsu, Shinya & Yoshida, Nobuo, 2014. "Hybrid survey to improve the reliability of poverty statistics in a cost-effective manner," Policy Research Working Paper Series 6909, The World Bank.
    7. Oasis Kodila-Tedika & Simplice Asongu & Florentin Azia-Dimbu, 2015. "Statistics and IQ in Developing Countries: A Note," Working Papers 15/030, African Governance and Development Institute..
    8. Kafle, Kashi & Jolliffe, Dean & Winter-Nelson, Alex, 2017. "Do Different Types of Assets Have Differential Effects on Child Education? Evidence from Tanzania," IZA Discussion Papers 11233, Institute for the Study of Labor (IZA).
    9. repec:wsi:jdexxx:v:22:y:2017:i:01:n:s1084946717500078 is not listed on IDEAS
    10. Akotey, Joseph Oscar & Adjasi, Charles K.D., 2016. "Does Microcredit Increase Household Welfare in the Absence of Microinsurance?," World Development, Elsevier, vol. 77(C), pages 380-394.
    11. Oasis Kodila-Tedika, 2014. "Africa's statistical tragedy: best statistics, best government effectiveness," International Journal of Development Issues, Emerald Group Publishing, vol. 13(2), pages 171-178, July.
    12. Stephan Klasen & Derek Blades, 2013. "Issues and Challenges in Measuring National Income, Wealth, Poverty, and Inequality in Sub-Saharan African Countries: An Introduction," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59, pages 1-8, October.
    13. Lionel Roger, 2018. "Blinded by the Light? Heterogeneity in the Luminosity-Growth Nexus and the African Growth Miracle," Discussion Papers 2018-04, University of Nottingham, CREDIT.
    14. Newhouse, D. & Shivakumaran, S. & Takamatsu, S. & Yoshida, N., 2014. "How survey-to-survey imputation can fail," Policy Research Working Paper Series 6961, The World Bank.
    15. Branko Milanovic & Carlos Villalobos Barría & Stephan Klasen & Sebastian Vollmer, 2016. "The Distribution Dynamics of Human Development in Mexico 1990–2010," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62, pages 47-67, August.
    16. Gaddis,Isis, 2016. "Prices for poverty analysis in Africa," Policy Research Working Paper Series 7652, The World Bank.
    17. Kenneth Harttgen & Stefan Lang & Judith Santer, 2015. "Multilevel Modelling of Child Mortality in Africa," Working Papers 2015-03, Faculty of Economics and Statistics, University of Innsbruck.
    18. José Noguera-Santaella, 2017. "Is Sub-Saharan Africa catching up?," Empirical Economics, Springer, vol. 52(2), pages 555-575, March.
    19. Jerven, Morten, 2014. "African growth miracle or statistical tragedy? Interpreting trends in the data over the past two decades," WIDER Working Paper Series 114, World Institute for Development Economic Research (UNU-WIDER).
    20. Van Q. Tran & Sabina Alkire & Stephan Klasen, 2015. "Static and Dynamic Disparities between Monetary and Multidimensional Poverty Measurement: Evidence from Vietnam," Research on Economic Inequality,in: Measurement of Poverty, Deprivation, and Economic Mobility, volume 23, pages 249-281 Emerald Publishing Ltd.
    21. Harttgen, Kenneth & Vollmer, Sebastian, 2013. "Using an asset index to simulate household income," Economics Letters, Elsevier, vol. 121(2), pages 257-262.

    More about this item

    Keywords

    Asset index; GDP growth; Africa;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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