Distributional Consequence of Trade Exposure in Rural Ethiopia: A Household Level Analysis

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2008-06

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A.A.U

Abstract

The paper attemph to examille the r!clemllllClI1tJ of inwme inequality, and the interrelationship betloeell mltivation of ''ash t7VPS and the exZ:rli/~ ~ illtvme illequity ill the nl1"(11 Ethiopia jtvm 1994-2000 applyillg the regression-based detvmpositioll lVIih Shapley value Dewmpositioll of Shorro"ks(1999) using the ERHS of Department of E,vnomi"., .M U. The mult indimtes that household size, dependellry ratio alld age of the head of the hOUJeho/d ill Ihe f annly a/fed the per-capita t"OlIsumptioll/ imvme negatively. Produdng exportable items ,vntribll/t' pOiitively to the household's per-mpita income. Per-mpita lalld holding, credit fadlity, alld proportioll of work ing adults (both male and female) imp",1 fonSllmptioli expenditure/ illmme positively. Male headed ho,mho/ds have higher infome fompared to female headed. The decomposition result reveaIJ tl'al lIone of the included variables in the model are Jound to be equali'{!ng, meaning that each of the variables exaarbates income inequality. Per-fa pita land holding, household size and location are the tI/{ljor wntnbutor to the overall inequality.

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Distributional Consequence of Trade Exposure in rural Ethiopia

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