The Dynamics of Income Inequality in Rural Areas of Nigeria

Abstract

The main aim of this study is to measure rural income inequality and assess its disparities across zones, planting periods and socioeconomic characteristics and also to determine the defining factors of income inequality in rural areas. The study covered 3,164 rural households across the six geopolitical zones in Nigeria. They include; North West, North East, North Central, South West, South East, and South South. In addition, the study designs also featured classification based on the two main planting periods in Nigeria which are post-plant periods and post-harvest. Data were extracted from the 2012/2013 General Household Survey under the Living Standard Survey Measurement programme of the World Bank. Data analysis approach include the use of descriptive statistics, Gini and Theil index methodology and regression based decomposition analysis. The result showed that income inequality among rural households in Nigeria is 0.3460 and 0.2500 Gini and Theil index respectively. Among the geographical zones, inequality is highest in the North West with Gini and Theil indices of 0.3726 and 0.4338, and lowest in the North East with Gini and Theil index of 0.2972 and 0.1516 respectively. While the result showed that rural households are more income insecure in post-plant periods; gender, rural household size and number of dependants were identified factors influencing rural income inequality in Nigeria. The study recommended the need to restructure the concept of rurality to create rural job opportunities, integrate rural policies across geopolitical zones and create equal access to skills and educational opportunities across age group and gender.