Nature, Distribution and Evolution of Poverty & Inequality in Uganda

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Concepts, methods and data2.5 The inequality measure, Gini coefficientThe previous sections discuss the poverty measuresand focus on where individuals find themselvesin relation to the poverty line. They thereforeprovide statistics summarizing the bottom of theconsumption distribution (i.e. those that fall belowthe poverty line). In this report inequality refers tothe dispersion of the distribution over the entire(estimated) consumption aggregate. There are anumber of indices used to measure inequality andthese include the Theil Entropy index, coefficientof variation and the Gini coefficient. The mostwidely used measure of inequality is the Gini index.It ranges from zero (indicating perfect equality,i.e. where everyone in the population has thesame expenditure or income) to one (indicatingperfect inequality, i.e. when all expenditure orincome is accounted for by a single person in thepopulation). A high value of the Gini coefficientimplies that a few people have most of the incomeor consumption and the majority has less. Formost developing countries, the Gini index rangesbetween 0.3 and 0.6 (World Bank, 2005).Once again, we demonstrate how to interpretthe inequality maps using Northern Uganda asan example. The Gini coefficient for sub-countiesin Northern Uganda is shown in Map 2.4. Thepink areas show relatively high inequality withinsub-counties and the light green shading showsareas with low inequality. The map indicates thatinequality is heterogeneously distributed in theregion. There are no sub-counties with inequalitylevels below 0.25 and there are 38 sub-countieswith Gini coefficients above 0.40. For instance,the least poor sub-county of Namasale in KiogaCounty also has the one of the highest inequalitylevels (0.47) in the region. This implies that a largeproportion of the income or consumption in thesub-county is owned by a few households. Incontrast, the lowest inequality (less than 0.25) inthe region is found in Lopei Sub-county (implyingthat the income or consumption is generallyowned by many households). This sub-county hasan 89% poverty rate, implying virtually everyoneis poor. We discuss these distributions in moredetail in the next chapter.18 Nature, distribution and evolution of poverty and inequality in Uganda, 1992 - 2002
Concepts, methods and dataMap 2.4 Interpreting the Income Inequality Measure:Northern Region sub-county-level Gini Coefficient ExampleNature, distribution and evolution of poverty and inequality in Uganda, 1992 - 2002 19
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Appendix 1. - Expenditure-based sma
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Table A3. - Uganda Rural Poverty Ra
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REGIONIndividualDISTRICT Headcount
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IndividualREGION Headcount Poverty
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Table A4. - Uganda Urban Poverty ra
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DISTRICTIndividualCOUNTY Headcount
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Table A5. - Uganda Rural changes in
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Region/District County No of poor P
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Region/District County No of poor P
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Nature, Distribution and Evolution of Poverty & Inequality in Uganda

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