Poverty Changes in Tanzania: An Assessment of Income Growth, Inequality and Population Shifts in Kagera, 1991–2010

Abstract

This study decomposes the Kagera headcount poverty index into effects of income growth, income inequality, and population shifts. In the literature, the decomposition of poverty into growth and inequality components—which began with Kuznets (1955)—is continuing, with the results still being inconclusive. Later analyses have also incorporated the effects of population shifts into the poverty dynamics, as migrants ordinarily benefit from new avenues of reducing poverty, which however are not without negative effects. Using the Kagera Health and Development Survey (KDHS) data, the paper uses Son’s (2003) approach to decompose poverty in Kagera Region into income growth, inequality, and population shifts. The results show that growth leads to poverty reduction; population shifts tend to have mixed results depending on how the data are partitioned; whereas inequality effects were found to change with the base year. The findings imply that policies geared at reducing poverty should not be divorced from location-specific situations.