A spatial analysis of how growth and inequality affect poverty in Brazil

Helson Gomes De Souza,Jair Andrade De Araújo,Pablo Urano De Carvalho Castelar,Francisco José Silva Tabosa

doi:10.1590/0034-761220190349

Helson Gomes De Souza, Jair Andrade De Araújo + Show 2 more

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https://doi.org/10.1590/0034-761220190349

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Abstract

Abstract This research seeks to analyze the impacts of economic growth and income inequality on Brazilian states’ urban and rural poverty, considering the effects of the initial levels of development and inequality. The elasticities of income and inequality of poverty were calculated through a dynamic spatial panel, using an adaptation of the approach developed by Kalwij and Verschoor (2004), and data from 2004 to 2014. Incorporating the spatial factor allows us to capture the effects of the geographical location on local poverty. The results suggest that a poverty reduction occurs more intensely when associated with reductions in the inequality levels. Income elasticities were greater (in absolute terms) in rural areas, while the inequality elasticities were greater in the urban area estimates. The growing trend of the inequality elasticity and the decreasing trend of the income elasticity suggest a positive trend of economic growth and a negative trend of poverty. Likewise, if the reduction in inequality shows a negative trend, the absolute value of poverty will decrease. Thus, a public policy to combat poverty through economic growth or reducing inequalities applied to the urban or rural environment would obtain more efficient results if applied in the long term.

Highlights

IntroductionPoverty in its basic concept refers to some kind of deprivation, which may be only material or include cultural and social elements, in the face of available resources of a person or family
A recurrent theme in economic research concerns poverty, its determinants and, more importantly, how to more adequately prepare public policies aimed at decreasing the number of people living in sub-optimal conditions, deprived of basic goods and services.Poverty in its basic concept refers to some kind of deprivation, which may be only material or include cultural and social elements, in the face of available resources of a person or family
As for the economic growth and its interactions with the inverse of the initial development, it is verified that the sign is positive for the proportion of poor (0.9723) and for the quadratic hiatus of poverty (3.7026), and there is statistical significance for these indicators

Summary

Introduction

Poverty in its basic concept refers to some kind of deprivation, which may be only material or include cultural and social elements, in the face of available resources of a person or family. This deprivation may be of an absolute, relative or subjective nature (Kageyama & Hoffmann, 2006). As a driving force for the negative variations in the conditions of poverty, Araújo et al (2013) highlight the effects of economic growth and public policies of a redistributive nature. Rocha (2006) discusses the important role of education and the labor market in fighting poverty

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