Income and household welfare in Uganda

Abstract

Employing total consumption expenditure as a household-level welfare indicator with which to measure poverty has often been criticized because it is felt that such an indicator does not account for differing access to, and cost of, publicly provided services. This r discusses when and how adjustments can be made to expenditures derived from household surveys so as to reflect the consumption of basic services. Markets which are subsidised, rationed and subject to increasing marginal tariff pricing are. Household welfare in Sub – Saharan Africa is declining as evidenced by low consumption expenditure as well as increasing poverty levels. This study looked at the relationship between income inequality and household welfare in Uganda. The study utilized panel data derived from the current four rounds of the Uganda National Survey. In order to estimate household welfare, the study employed household consumption expenditure and poverty level as proxies and Gini coefficient for income inequality. The findings of the study revealed that the welfare of households is considerably enhanced by the household demographic characteristics. However, the results for all model specified show the relationship between income inequality and welfare of households. To reduce poverty and thus increase consumption expenditure, households, government, policy makers and other stakeholders ought to diversify the economy.