Poverty Impact of Variations in Within-group and Between-group Inequality in Nigeria: New Estimates Using Two Household Survey Data

Abstract

In an unequal and fragile economy such as Nigeria, providing for the extreme poor, marginalized, disadvantaged, less privileged and vulnerable is still seen by elites as providing for the unproductive segment. This notion seems to be one of the reasons why the elites in government have not done much to scale down poverty and inequality. The study estimates the poverty impact of variations in within-group and between-group inequality using two sequential household survey data, the harmonized national living standard survey, 2010 and the national living standard survey, 2004. Specifically, the study explains the spatial and sectoral variations in estimates of the marginal poverty impact and elasticity with respect to within-group and between-group inequality. The main findings are; first, that within-group inequality and between-group inequality estimates are sensitive to the choice of Foster–Greer–Thorbecke (FGT) poverty measure, and might as well be sensitive to the choice of poverty line; second, that non-homogeneity is due to variations in the initial sub-group distributions; finally, that altering within-group inequality will have more important impact on poverty reduction than altering between-group inequality.