Income distribution and poverty in Kenya: a statistical analysis
Income distribution and poverty in Kenya: a statistical analysis
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Institute for Development Studies, University of Nairobi
Type
Series paper (non-IDS)
Abstract
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The paper addresses the relationship between income distribution,
regional and sectoral income disparities, and poverty in Kenya.
The data used in the estimation of the degree of income inequality
are consistent with the National Accounts and the Population Census; three
different household groups are distinguisheds urban households, smallholders
and other rural families. The within-group income distribution of the two
rural household groups are proxied by consumption and land distribution,
respectively; while the estimation of the overall income inequality assumes
a lognormal distribution pattern.
The result of the analysis suggests that income in Kenya is
distributed very inequally, with a Gini-ratio in the neighbourhood of
0.60. Moreover, the sectoral decomposition of the total inequality indicates
that dualism within rural Kenya is almost as important as the urbanrural
disparity. However, the disaggregation at the provincial level adds
very little to the understanding of the source of income Inequality, with
less than 10 per cent of the variation in income explained by the provincial
grouping.
The analysis of poverty finds poverty is a rural as well as
an urban phenomenon. However, rural poverty is more striking, both in
terms of extent and intensity. Indeed, 33 per cent of all the rural
households are affected by poverty and their average income equals only
55 per cent of the poverty-line. For the urban households, the figures
are 15 and 65 per cent respectively.
Keywords
Poverty