What are the gains from a better education, more land ownership, or a different occupation in Bangladesh? Do the gains differ in urban and rural areas? Have they remained stable over time? Do household size, family structure, and gender affect well-being? Do consumption, poverty, and inequality depend more on characteristics of households or on the areas in which those households are located?
Using household data from five successive national surveys, Wodon analyzes the microdeterminants of (and changes in) consumption, poverty, growth, and inequality in Bangladesh from 1983 to 1996.
Education, demographics, land ownership, occupation, and geographic location all affect consumption and poverty. The gains in per capita consumption associated with many of these household characteristics tend to be stable over time.
Returns to demographics (variables in household size) have the greatest impact on growth, perhaps because of improving employment opportunities for women.
Education (in urban areas) and land (in rural areas) contribute most to measures of between-group inequality. Location takes second place, in both urban and rural areas.
Wodon introduces the concept of conditional between-group inequality. Existing group decompositions of the Gini index along one variable do not control for other characteristics correlated with that variable. Conditional between-group Ginis avoid this pitfall. He also shows how to use unconditional and conditional between-group Ginis for simulating policies.
This paper—a product of the Poverty Reduction and Economic Management Sector Unit, South Asia Region—was written as part of background work for the Bangladesh poverty assessment. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Jillian Badami, room MC10-336, telephone 202-458-0425, fax 202-522-2428, Internet address jbadami@worldbank.org. The author may be contacted at qwodon@worldbank.org. (33 pages)
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