Growth, Inequality, and Simulated Poverty Paths for Tanzania, 1992-2002

37 Pages Posted: 20 Apr 2016

See all articles by Gabriel Demombynes

Gabriel Demombynes

University of California, Berkeley; World Bank

J. G. M. (Hans) Hoogeveen

World Bank - Research Department

Multiple version iconThere are 2 versions of this paper

Date Written: October 18, 2004

Abstract

Although Tanzania experienced relatively rapid growth in per capita GDP in the 1995-2001 period, household budget survey (HBS) data show only a modest and statistically insignificant decline in poverty between 1992 and 2001. To assess the likely trajectory of poverty rates over the course of the period, changes in poverty are simulated using unit-record HBS data and national accounts growth rates under varying assumptions for growth rates and inequality changes. To this end the projection approach of Datt and Walker (2002) is used along with an extension that is better suited to taking into account distributional changes observed between the two household surveys. The simulations suggest that following increases in poverty during the economic slowdown of the early 1990s, recent growth in Tanzania has brought a decline in poverty, particularly in urban areas. Unless recent growth is sustained, the country will not meet its 2015 Millennium Development Goal (MDG). Poverty reduction is on track in urban areas, but reaching the MDG target for bringing down poverty in rural areas, where most Tanzanians live, requires sustaining high growth in rural output per capita.

This paper - a product of the Poverty Reduction and Economic Management 2 Team, Africa Technical Families - is part of a larger effort in the Tanzania country team to investigate the relation between economic growth and poverty reduction.

Suggested Citation

Demombynes, Gabriel and Hoogeveen, Johannes G. M. (Hans), Growth, Inequality, and Simulated Poverty Paths for Tanzania, 1992-2002 (October 18, 2004). World Bank Policy Research Working Paper No. 3432. Available at SSRN: https://ssrn.com/abstract=625310

Gabriel Demombynes (Contact Author)

University of California, Berkeley

310 Barrows Hall
Berkeley, CA 94720
United States

World Bank

1818 H Street, N.W.
Washington, DC 20433
United States

Johannes G. M. (Hans) Hoogeveen

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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