ABSTRACT
Income inequality is one of the major underdevelopment problems facing developing countries
including Nigeria. Despite serious attention given to inequality in both theoretical and empirical
literature, it is still understudied in the case of Nigeria because most empirical studies
overaggregate analysis. This study departs from existing studies in two ways. First, the study
disaggregates household consumption expenditure into food and nonfood and thus decomposes
inequality into within-groups and between-groups components using generalised Entropy (GE)
measures. The purpose is to ascertain where inequality in household consumption expenditure is
coming from. Second, the study employs regression-based inequality decomposition to ascertain
the determinants of inequality in food and nonfood expenditure using household demographic
and socioeconomic characteristics as covariates. The data used in the analyses is the 2010
Harmonised Household Living Standards Survey for Nigeria. The results show that nonfood
expenditure is the major source of inequality in household consumption expenditure in both
urban and rural areas with inequality coefficients of above 0.6 compared to about 0.4 for food
expenditure. The decompositions also show that within-group inequalities for nonfood and food
expenditure are respectively 0.97 and 0.365 using the Theil index, while between-group
inequalities for nonfood and food are respectively 0.016 and 0.035. Furthermore, the regression
based inequality decompositions show that variables such as living in rural areas, household
size, household dwelling and household dwelling characteristics account for the significant
proportion of inequality in food and nonfood expenditure. The policy recommendation of this
study, among others, is that policies should focus on addressing inequality within rural and
urban areas especially with respect to nonfood expenditure than in inequality existing between
urban and rural areas. Some of the nonfood expenditures that need to be paid attention to are expenditure in education, health, energy, accommodation, water and sanitation.
Ifeanyichukwu, O (2021). Decomposition Analysis Of Inequalities In Household Consumption Expenditure In Nigeria. Afribary. Retrieved from https://afribary.com/works/decomposition-analysis-of-inequalities-in-household-consumption-expenditure-in-nigeria
Ifeanyichukwu, Ojonta "Decomposition Analysis Of Inequalities In Household Consumption Expenditure In Nigeria" Afribary. Afribary, 13 May. 2021, https://afribary.com/works/decomposition-analysis-of-inequalities-in-household-consumption-expenditure-in-nigeria. Accessed 26 Dec. 2024.
Ifeanyichukwu, Ojonta . "Decomposition Analysis Of Inequalities In Household Consumption Expenditure In Nigeria". Afribary, Afribary, 13 May. 2021. Web. 26 Dec. 2024. < https://afribary.com/works/decomposition-analysis-of-inequalities-in-household-consumption-expenditure-in-nigeria >.
Ifeanyichukwu, Ojonta . "Decomposition Analysis Of Inequalities In Household Consumption Expenditure In Nigeria" Afribary (2021). Accessed December 26, 2024. https://afribary.com/works/decomposition-analysis-of-inequalities-in-household-consumption-expenditure-in-nigeria