This study documents changes in consumption inequality in Ghana from 2005 to 2017. It focused on the causal link from consumption inequality to household multidimensional poverty.

The research was done by members of ACEIR’s Kenya node: Dr Raymond E. Kofinti, Prof. Damiano K. Manda, Dr Martine Olechea, and Prof. Germano Mwabu.

The team used three rounds of the Ghana Living Standards Survey, augmented with district-level administrative data. Consumption inequality was measured by using the Gini coefficient at the district level, and multidimensional poverty was measured using the Oxford Poverty and Human Development Initiative's index. The control function approach was employed to measure the effect of consumption inequality on multi-dimensional poverty. 

The researchers found an upward trend in district consumption inequality at the national level between 2005 and 2017, which is consistent with the inequality trends for the Savannah and Forest ecological zones but not with the trends for the Coastal zone.

The main result from the regression analysis was that inequality increased multidimensional poverty, a finding that was robust to alternative measures of inequality and poverty. They also found that the association between poverty and inequality was more pronounced in rural areas and amongst male-headed households.

Neighbourhood unrest was an important channel through which inequality operated to increase multidimensional poverty. The authors put forward policies that the government can use to reduce both poverty and inequality in Ghana.

About the author

Photograph of Raymond Elikplim Kofinti

Dr Raymond Elikplim Kofinti is a lecturer at the Department of Data Science and Economic Policy, School of Economics, University of Cape Coast, Ghana. He currently collaborating on research by the Kenya node after being awarded an ARUA Emerging Career Researcher Fellowship in 2023. Raymond is an applied economics researcher with interests in welfare economics and global health research. His research involves a multifaceted approach to examining poverty, deprivations, inequalities, and health using mathematical and applied econometrics techniques. He has acquired the requisite experience and international exposure from the mobility programmes sponsored by the African Economic Research Consortium and the Africa Institute–Western University, London–Ontario. Raymond aspires to contribute to inequality–poverty research significantly, be at the forefront of graduate training, and make intellectual contributions to welfare-related policy options and dialogues within sub-Saharan Africa.