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The poverty-inequality relationship in Malawi: A multidimensional perspective

  • Mussa, Richard

This paper looks at the linkage between poverty and inequality by investigating the poverty impacts of changes in within and between inequalities in Malawi. We recognize the multidimensional nature of both poverty and inequality by focusing on monetary (consumption) and non monetary (health and education) dimensions of well being. Two questions are answered namely; what is the contribution of within-group inequalities (vertical inequalities) to total poverty? And what is the contribution of between-group inequalities (horizontal inequalities) to total poverty? The second integrated household survey (IHS2) is used, and the results differ considerably across the three dimensions of well being. The elasticity of poverty with respect to within-region consumption inequalities is positive and higher than that of between-region inequalities, suggesting that reductions in vertical inequalities in consumption would have a higher poverty reducing effect. Between-region inequalities in health have a larger and positive effect on the health poverty headcount; on the other hand within-region inequalities in health have a larger and positive relationship with the health poverty gap and severity. We also find that an increase in both within and between region education inequalities reduce the education poverty headcount, but increase the education poverty gap and severity.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31413.

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Date of creation: 10 Jun 2011
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Handle: RePEc:pra:mprapa:31413
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  1. 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.
  2. Augustin Kwasi Fosu, 2009. "Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa," Brooks World Poverty Institute Working Paper Series 9809, BWPI, The University of Manchester.
  3. Abdelkrim Araar & Jean-Yves Duclos, 2010. "Poverty and Inequality: A Micro Framework," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 19(3), pages 357-398, June.
  4. Donaldson, David & Weymark, John A., 1983. "Ethically flexible gini indices for income distributions in the continuum," Journal of Economic Theory, Elsevier, vol. 29(2), pages 353-358, April.
  5. 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.
  6. Augustin Kwasi Fosu, 2008. "Inequality and the growth-poverty nexus: specification empirics using African data," Applied Economics Letters, Taylor & Francis Journals, vol. 15(7), pages 563-566.
  7. Mussa, Richard, 2010. "Spatial Comparisons of Poverty and Inequality in Living Standards in Malawi," MPRA Paper 23576, University Library of Munich, Germany.
  8. Basu, Kaushik & Foster, James E, 1998. "On Measuring Literacy," Economic Journal, Royal Economic Society, vol. 108(451), pages 1733-49, November.
  9. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
  10. Wagstaff, Adam & Paci, Pierella & van Doorslaer, Eddy, 1991. "On the measurement of inequalities in health," Social Science & Medicine, Elsevier, vol. 33(5), pages 545-557, January.
  11. David E. Sahn & Stephen D. Younger, 2006. "Changes in inequality and poverty in Latin America: Looking beyond income to health and education," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 215-234, November.
  12. Mukherjee, Sanjukta & Benson, Todd, 2003. "The Determinants of Poverty in Malawi, 1998," World Development, Elsevier, vol. 31(2), pages 339-358, February.
  13. David E. Sahn & David C. Stifel, 2002. "Robust Comparisons of Malnutrition in Developing Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 716-735.
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