Estimating Economic Growth and Inequality Elasticities of Poverty in Rural Nigeria

Adigun,, G.T and Awoyemi,, T.T and Omonona, B.T (2011) Estimating Economic Growth and Inequality Elasticities of Poverty in Rural Nigeria. Estimating Economic Growth and Inequality Elasticities of Poverty in Rural Nigeria, 4 (1). pp. 25-35.

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Abstract

In order to achieve poverty reduction, both economic growth and equity have assumed a central place. It is against this background that this paper analyzes income growth and inequality elasticities of poverty in Nigeria over a period of time. The results are based on the analysis of secondary data obtained from National Consumer Survey of 1996 and 2003/2004 Nigeria Living Standard Survey. We use changes in mean per capita expenditure as a yardstick of economic growth and adopt simple but powerful ratio estimates of Economic Growth and Inequality elasticities of poverty. The growth elasticity of poverty indicates that 1 percent increase in income growth will lead to 0.624 percent reduction in poverty. The inequality elasticity of poverty shows that a decrease of inequality by 1 percent would have decreased poverty by just 0.34 percent. The result implies that what matters for poverty reduction is mainly accelerated economic growth, redistribution and reductions in inequality Keywords: Economic growth, elasticity, inequality, poverty reduction, rural Nigeria.

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