Decomposition of inequality in the distribution of living standards in Cameroon

Abstract

This paper examines the characteristics of inequality and its decomposition via the Generalized Entropy Class of indices. It uses the 1996 Cameroon Household Consumption Survey generated by the national Statistics Office. Inequality is most pronounced in the urban areas, among the highly educated, women heads of household, young household heads, formal sector employees, and skilled workers. Total inequality is overwhelmingly accounted for by the within-group components and the between-group contributions are marginal in some cases, and negligible in others. Policies to reduce inequality in Cameroon must, therefore, focus more on within-group components. An apparent trade-off between poverty and inequality was observed. Policy indications emerging from the paper suggest that consistent actions to address the twin problem of poverty and inequality can best be designed within the ambit of carefully targeted transfers that are group neutral, yet reaching the vulnerable segments of each group. African Journal of Economic Policy Vol. 9(2) 2002: 51-76