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Measurement and Sources of Income Inequality among Rural and Urban Households in Nigeria

Author

Listed:
  • Abayomi Samuel Oyekale
  • Adetola Ibidunni Adeoti
  • Tolulope Olayemi Oyekale

Abstract

Income inequality and poverty are closely related. This study decomposed income inequality in Nigeria using the Gini-decomposition, regression-based and Shapley approaches. Results show that in 2004, income inequality is higher in rural areas than in urban areas. The study also noted that employment income increases inequality while agricultural income decreases inequality. Factors suchs as urbanization, residence in the southwest zone, household size, the house head's formal education, number of time suffered from illness, engagement in a paid job, involvement in a non-farm business, formal credit and informal credit contributed to the increased income inequality. Between 1998 and 2004, income redistribution and income growth increased poverty. The study recommended that welfare enhancing programs that will benefit urban/rural poor should be identified, while better economic opportunities should be created for those in rural areas.

Suggested Citation

  • Abayomi Samuel Oyekale & Adetola Ibidunni Adeoti & Tolulope Olayemi Oyekale, 2006. "Measurement and Sources of Income Inequality among Rural and Urban Households in Nigeria," Working Papers PMMA 2006-20, PEP-PMMA.
    • Handle: RePEc:lvl:pmmacr:2006-20
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    File URL: https://portal.pep-net.org/documents/download/id/13556
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    References listed on IDEAS

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    1. A.B. Atkinson & F. Bourguignon (ed.), 2000. "Handbook of Income Distribution," Handbook of Income Distribution, Elsevier, edition 1, volume 1, number 1.
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    3. Clarke, George & Xu, Lixin Colin & Zou, Heng-fu, 2003. "Finance and income inequality : test of alternative theories," Policy Research Working Paper Series 2984, The World Bank.
    4. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
    5. Kanbur, Ravi & Lustig, Nora, 1999. "Why is Inequality Back on the Agenda?," Working Papers 127690, Cornell University, Department of Applied Economics and Management.
    6. Gary S. Fields & Gyeongjoon Yoo, 2000. "Falling Labor Income Inequality In Korea'S Economic Growth: Patterns And Underlying Causes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(2), pages 139-159, June.
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    Cited by:

    1. Zagdbazar, Manlaibaatar, 2025. "Inequality Reduction in Mongolia: A Dynamic Income Source Analysis," MPRA Paper 125662, University Library of Munich, Germany.
    2. Zagdbazar, Manlaibaatar, 2025. "Inequality Reduction in Mongolia: A Dynamic Income Source Analysis," MPRA Paper 125762, University Library of Munich, Germany.
    3. Ayinde, Opeyemi Eyitayo & Muchie, Mammo & Babatunde, Raphael O. & Adewumi, Matthew Olaniyi & Ayinde, Kayode & Ibitoye, Olalekan, 2012. "Analysis Of Income Inequality In Nigerian Agricultural Economy: A Case Study Of Ekiti State," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126228, International Association of Agricultural Economists.
    4. Oluwakemi Adeola Obayelu, 2014. "Spatial Decomposition Of Poverty In Rural Nigeria: Shapley Decomposition Approach," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(4), pages 77-97, December.
    5. Adeola, Olajide O. & Doppler, W., 2011. "Family Income and Cash Flow of Rural Households in South East Nigeria: A Comparative and Gender – Based Analysis," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 1(4), pages 1-11, December.
    6. Omotola, Aderonke M. & Okoruwa, Victor O., 2016. "Inclusive Growth pattern in Rural Southwestern Nigeria: Opportunities and Challenges," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249313, African Association of Agricultural Economists (AAAE).
    7. Awoniyi, Olabisi A. & Falusi, Abiodun O. & Adeoti, Adetola I., 2009. "Decomposition Analysis of Political Inequality among Rural Households in Nigeria," Journal of Rural Economics and Development, University of Ibadan, Department of Agricultural Economics, vol. 18, pages 1-9.

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    Keywords

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    JEL classification:

    • D3 - Microeconomics - - Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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