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Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford University April, 2008

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Page 1: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Evolution of Horizontal Inequalities in Madagascar,

1999- 2005

David Stifel (Lafayette)

Felix Forster (Lafayette)

Chris Barrett (Cornell)

Oxford University April, 2008

Page 2: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Overview

• Introduction

• Economic Context

• Data and Group Dimensions

• Welfare Ordering of Groups

• Econometric Estimates & Differential Returns to Assets

• Concluding Remarks

Page 3: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

The Setting: Madagascar

Economic Context:• Sustained growth in late 1990s• 2001-02: Political crisis

• General strikes

• Destruction of key infrastructure

• 2004-05: • Strong Depreciation of Currency

• Rise in international oil and rice prices

• Phase-out of Multi-Fibre Agreement

• Average Growth: 5 %

Page 4: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Data

• Enquête Périodique Auprès des Ménages (EPM),

• Nationally representative integrated household survey

• Collected by Institut National de la Statistique

• Years: 1999; 2001; 2005• Sample Size: 5,120; 5,080; 11,781• Repeated Cross-sections

Page 5: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Data

• Commune Census, 2001

• Conducted by: • Ilo program of Cornell University • National Malagasy agricultural research institute

(FOFIFA)• INSTAT

• Covered 1,385 out of 1,392 communes

• Used for Remoteness

Page 6: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Measures

• Welfare: Per Capita HH Expenditure (Consumption)

• Remoteness: Cost of transporting 50kg sack of rice to market – 5 Quintiles + Urban

• Gender of HH head: temporarily, permanently female-headed, male-headed

• Education of HH head: highest educational attainment – none, primary, secondary(+)

• Land holdings: less than 1 HA, 1 – 5 HA, 5+ HA • Ethnicity: Merina ethnic group, other

Page 7: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Distribution of Per Capita Consumption by Education of Household Head1999

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Page 8: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Distribution of Household Expenditure by Temporary/Permanent Female-Headedness

1999

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Page 9: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Distribution of HH Expenditure by Remoteness (by Year)1999

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Urban

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Page 10: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Distribution of HH Expenditure by Land Holdings

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Page 11: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Distributions of Per Capita Consumption by Ethnic Group

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Other - 2001

Other - 2005

Merina - 2001

Merina - 2005

Page 12: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Coeff t-stat Coeff t-stat Coeff t-stat

Head Educ (left out = none)Primary 0.169 3.01 *** 0.102 2.46 ** 0.106 1.87 *

At least Secondary 0.515 9.71 *** 0.606 14.88 *** 0.401 7.74 ***

HH Head is female (left out = male head)Temporary (spouse alive) -0.406 -1.27 -0.193 -1.70 * 0.005 0.08

Permanent (no living spouse) -0.142 -2.41 ** -0.112 -2.56 ** -0.079 -3.03 ***

Remoteness (left out = urban)Most remote -0.086 -0.85 -0.465 -7.23 *** -0.426 -7.91 ***

Q2 -0.139 -1.37 -0.462 -7.10 *** -0.306 -5.54 ***

Q3 -0.175 -2.02 ** -0.384 -5.19 *** -0.334 -6.20 ***

Q4 -0.077 -0.89 -0.329 -4.94 *** -0.372 -7.24 ***

Least remote -0.083 -1.03 -0.339 -5.09 *** -0.240 -4.51 ***

Land Holdings (left out = < 1)Small (1 - 5 hectares) 0.346 3.15 *** 0.233 2.35 ** 0.153 1.65 *

Large (5+ hectares) 0.286 4.62 *** 0.351 7.10 *** 0.029 0.72

Note: Representative household is male-headed, without education, land poor, living in urban Antananarivo Province.

Note: *, ** and *** indicate significance at the 90, 95 and 99 percent level of confidence, respectively.

Note: Interactions appear in Appendix Table 1

1999 2001 2005

Determinants of Per Capita Household Consumption

Page 13: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Differential Marginal Effects of Education on Per Capita Consumption

Coeff. t-stat Coeff. t-stat Difference t-stat Difference t-stat

1999Gender of Household Head

Female temporary (spouse alive) 0.704 1.34 1.192 2.36 ** 0.535 1.01 0.677 1.33

Female permanent (no living spouse) 0.337 3.35 *** 0.721 7.13 *** 0.168 1.45 0.206 1.80 *

Male 0.169 3.01 *** 0.515 9.71 *** .. .. .. ..

2001Gender of Household Head

Female temporary (spouse alive) 0.629 3.22 *** 0.754 3.90 *** 0.527 2.64 *** 0.147 0.75

Female permanent (no living spouse) 0.365 4.83 *** 0.804 10.42 *** 0.263 3.05 *** 0.198 2.26 **

Male 0.102 2.46 ** 0.606 14.88 *** .. .. .. ..

2005Gender of Household Head

Female temporary (spouse alive) 0.119 0.81 0.668 4.27 *** 0.013 0.08 0.267 1.62

Female permanent (no living spouse) 0.241 3.42 *** 0.589 8.46 *** 0.135 1.50 0.187 2.16 **

Male 0.106 1.87 * 0.401 7.74 *** .. .. .. ..

Note: *, ** and *** indicate significance at the 90, 95 and 99 percent level of confidence, respectively.

Marginal Effect Difference Relative to Urban/Male-Headed HHPrimary Secondary + Primary Secondary +

Page 14: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Differential Marginal Effects of Education on Per Capita Consumption

Coeff. t-stat Coeff. t-stat Difference t-stat Difference t-stat

1999Remoteness

Most remote 0.202 1.71 * 0.464 3.68 *** 0.033 0.25 -0.051 -0.38

Q2 0.211 1.57 0.412 2.97 *** 0.042 0.29 -0.103 -0.70

Q3 0.388 3.59 *** 0.655 5.68 *** 0.218 1.79 * 0.140 1.10

Q4 0.220 2.05 ** 0.451 3.93 *** 0.051 0.42 -0.064 -0.51

Least remote 0.199 2.03 ** 0.533 5.11 *** 0.030 0.26 0.018 0.15

Urban 0.169 3.01 *** 0.515 9.71 *** .. .. .. ..

2001Remoteness

Most remote 0.591 6.44 *** 1.126 11.10 *** 0.489 4.85 *** 0.520 4.76 ***

Q2 0.577 5.69 *** 0.930 8.37 *** 0.474 4.33 *** 0.324 2.73 ***

Q3 0.629 5.98 *** 0.900 8.34 *** 0.527 4.66 *** 0.294 2.54 **

Q4 0.513 5.57 *** 0.904 9.39 *** 0.410 4.06 *** 0.297 2.84 ***

Least remote 0.612 6.44 *** 1.022 10.19 *** 0.510 4.91 *** 0.415 3.84 ***

Urban 0.102 2.46 ** 0.606 14.88 *** .. .. .. ..

2005Remoteness

Most remote 0.548 8.53 *** 0.718 10.42 *** 0.443 5.16 *** 0.317 3.67 ***

Q2 0.388 5.76 *** 0.520 7.26 *** 0.283 3.21 *** 0.119 1.34

Q3 0.435 6.77 *** 0.670 10.20 *** 0.329 3.84 *** 0.269 3.21 ***

Q4 0.516 8.47 *** 0.779 12.20 *** 0.410 4.93 *** 0.378 4.59 ***

Least remote 0.393 6.05 *** 0.696 10.35 *** 0.287 3.33 *** 0.295 3.47 ***

Urban 0.106 1.87 * 0.401 7.74 *** .. .. .. ..

Note: *, ** and *** indicate significance at the 90, 95 and 99 percent level of confidence, respectively.

Primary Secondary +Marginal Effect Difference Relative to Urban/Male-Headed HH

Primary Secondary +

Page 15: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Differential Marginal Effects of Land Holdings on Per Capita Consumption

Coeff. t-stat Coeff. t-stat Difference t-stat Difference t-stat

1999Gender of Household Head

Female temporary (spouse alive) 1.263 2.09 ** 0.791 1.40 0.918 1.50 0.506 0.89

Female permanent (no living spouse) 0.579 3.64 *** 0.464 3.64 *** 0.233 1.21 0.179 1.26

Male 0.346 3.15 *** 0.286 4.62 *** .. .. .. ..

2001Gender of Household Head

Female temporary (spouse alive) 0.430 3.90 *** 0.610 2.54 ** 0.197 1.33 0.260 1.06

Female permanent (no living spouse) 0.407 10.42 *** 0.433 5.02 *** 0.174 1.63 0.082 0.83

Male 0.233 2.35 ** 0.351 7.10 *** .. .. .. ..

2005Gender of Household Head

Female temporary (spouse alive) 0.174 1.08 -0.038 -0.26 0.022 0.12 -0.067 -0.44

Female permanent (no living spouse) 0.250 2.45 ** -0.014 -0.22 0.097 0.71 -0.043 -0.57

Male 0.153 1.65 * 0.029 0.72 .. .. .. ..

Note: *, ** and *** indicate significance at the 90, 95 and 99 percent level of confidence, respectively.

Marginal Effect Difference Relative to Urban/Male-Headed HH1- 5 HA 5+ HA 1- 5 HA 5+ HA

Page 16: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Differential Marginal Effects of Land Holdings on Per Capita Consumption

Coeff. t-stat Coeff. t-stat Difference t-stat Difference t-stat

1999Remoteness

Most remote 0.141 0.91 0.284 1.79 * -0.205 -1.08 -0.002 -0.01

Q2 0.402 2.55 ** 0.278 1.60 0.056 0.29 -0.008 -0.04

Q3 0.411 3.30 *** 0.353 2.72 *** 0.065 0.39 0.067 0.47

Q4 0.184 1.56 0.205 1.64 -0.162 -1.01 -0.081 -0.58

Least remote 0.206 1.94 * 0.252 2.27 ** -0.139 -0.91 -0.034 -0.27

Urban 0.346 3.15 *** 0.286 4.62 *** .. .. .. ..

2001Remoteness

Most remote 0.598 11.10 *** 0.863 8.33 *** 0.364 3.23 *** 0.513 4.46 ***

Q2 0.623 8.37 *** 0.805 7.67 *** 0.390 3.14 *** 0.454 3.92 ***

Q3 0.538 8.34 *** 0.838 7.25 *** 0.304 2.57 *** 0.487 3.88 ***

Q4 0.567 9.39 *** 0.619 6.10 *** 0.333 2.87 *** 0.269 2.38 **

Least remote 0.443 10.19 *** 0.868 8.80 *** 0.210 1.93 * 0.518 4.69 ***

Urban 0.233 2.35 ** 0.351 7.10 *** .. .. .. ..

2005Remoteness

Most remote 0.449 6.60 *** 0.616 8.18 *** 0.297 2.58 *** 0.587 6.88 ***

Q2 0.419 5.66 *** 0.467 5.85 *** 0.266 2.25 ** 0.438 4.91 ***

Q3 0.414 6.05 *** 0.606 8.46 *** 0.262 2.28 ** 0.578 7.03 ***

Q4 0.463 7.59 *** 0.560 8.08 *** 0.311 2.80 *** 0.531 6.64 ***

Least remote 0.164 2.46 ** 0.381 5.56 *** 0.011 0.10 0.353 4.44 ***

Urban 0.153 1.65 * 0.029 0.72 .. .. .. ..

Note: *, ** and *** indicate significance at the 90, 95 and 99 percent level of confidence, respectively.

1- 5 HA 5+ HAMarginal Effect Difference Relative to Urban/Male-Headed HH

1- 5 HA 5+ HA

Page 17: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

ConclusionThree Key Messages

1. Core group of persistently poor households:• Uneducated• Land poor• Rural & remote• Female-headed

2. Vertical Inequalities within groups

3. Persistent horizontal inequalities associated with multiple different identities

• Some offsetting or even overcoming (women’s education)• Some reinforcing (land poor)

Page 18: Evolution of Horizontal Inequalities in Madagascar, 1999- 2005 David Stifel (Lafayette) Felix Forster (Lafayette) Chris Barrett (Cornell) Oxford UniversityApril,

Conclusion

Policy implications:• Gender & Marital Status – what mechanisms?• Land redistribution – not politically feasible • Education & Remoteness – amenable to interventions• Targeted interventions

– Unidimensional vs. multidimensional– Education – offset gender & geographic disadvantages