Decomposition of the Gini coefficient using Stata
The Gini coefficient is widely used to measure inequality in the distribution of income, consumption, and other welfare proxies. Decomposing this measure can help you understand the determinants of inequality. In this presentation, I will use income data from Mexico to illustrate a user-written command, descogini, that implements the Gini decomposition proposed by Lerman and Yitzhaki (1985, Review of Economics and Statistics 67: 151–156). Using this command, the Gini coefficient for total income can be decomposed in three terms: how important the income source is with respect to total income; how equally or unequally distributed the income source is; and how the income source and the distribution of total income are correlated. In the presentation, I will also illustrate how to obtain the impact that a marginal change in a particular income source will have on total income inequality, as well as how to obtain bootstrap standard errors.
The contribution of charcoal production to rural livelihoods in a semi-arid area in Kenya
Forest incomes in the form of both timber and non-timber forest products are an important source of livelihood for many communities in Africa. A major forest resource is charcoal, which contributes to the livelihoods of millions across the region. While incomes from charcoal are used to meet a wide spectrum of needs within rural livelihoods, the role of charcoal production on livelihoods of small-scale producers is not well understood. Therefore, we provide an example on the importance of charcoal on livelihoods in an agropastoralist community in a semi-arid region in Kenya. Based on a household questionnaire targeting 150 charcoal and 150 non-charcoal makers, as well as focus group discussions, we assessed the determinants for participation in charcoal production and developed a household typology based on charcoal income dependence. We also determined the role of charcoal in income equalization and poverty reduction. Our study shows that charcoal contributes about 20% of the household income in the study area. Gender, land size and the number of food-scarce months are the key determinants of participation in charcoal production. Based on the poverty analysis, we conclude that even though charcoal income does not lift the producers out of poverty, it can mitigate the impacts of poverty by reducing the poverty gap and poverty severity. Based on our findings, we recommend a multipronged approach to address sustainable rural livelihoods including a more explicit acknowledgement of charcoal production as a source of rural income. We also recommend broadening of the local livelihood base and a more active management of the woodland to ensure the sustainability of the income.
Remittances, Inequality and Poverty: Evidence from Rural Mexico
Economic research has produced conflicting findings on the distributional impacts of migrant remittances, and there has been little research on the effects of changes in remittances on poverty. This paper utilizes new data from the Mexico National Rural Household Survey, together with inequality and poverty decomposition techniques, to explore the impacts of remittances on rural inequality and poverty. Our findings suggest that remittances from international migrants become more equalizing (or less unequalizing), as well as more effective at reducing poverty, as the prevalence of migration increases.