This paper analyzes the determinants of income and the urban-rural income gap to highlight the urban-rural inequality problem in Cameroon. It concurrently uses the OLS regression, the conditional quantile regression as well as the Blinder-Oaxaca decomposition techniques to achieve this objective. The findings of OLS estimations show that human resources and social as well as physical capital play a major role in the improvement of welfare. Household size reduces the consumption expenditures both in rural and urban areas. The regions where the households reside also affect consumption expenditures. Household heads who work in the services sector and trade are better-off than those working in the other sectors of the economy. However, quantile regressions results show that households headed by the old people enjoy a higher level of welfare in the upper quintiles of the distribution of consumption. Household heads who work in the industrial sector have a negative relationship with consumption at the 10 th quintile of the distribution of household expenditures in the urban area. In the rural area, household heads working in the services sector have a positive relationship with consumption only at the 50 th and 90 th percentiles of the distribution of expenditures, whereas those belonging to the 10 th quintile have a negative relationship with consumption. In the rural area, the average time span spent to reach an asphalted road has a stronger positive impact on the consumption of households belonging to the 90 th percentile of the distribution of expenditures. Being a member of an association has a significant positive effect only on the consumption of households belonging to the 10 th quintile of the expenditures distribution. The study results derived with the help of the Oaxaca-Blinder decomposition method show that 59 percent of the welfare gap between urban and rural areas may be explained by differences in the characteristics, and most particularly in physical assets and education. The remaining 41 percent of the welfare gap is explained by discrimination.JEL Classification: O15, O18, D31, D63, O55
This study aims to construct a dynamic poverty profile for Cameroon in order to analyze the link between economy growth, poverty and inequality in that country, which has been under structural adjustment since more than 10 years. For poverty analysis, the costs of basic needs (CBN) method is used to estimate poverty lines, and the class of FGT indices developed by Foster, Greer, and Thorbecke (1984) is calculated to study, the incidence, intensity and severity of poverty. The analysis of the relationship between economic growth, poverty and inequality is based both on Kakwani's (1993) static decomposition approach which separately measures the impact of changes in average income and income inequality on poverty, and the dynamic decomposition methods by Datt and Ravaillon (1992) and Kakwani (1997) which break down changes in poverty into growth and redistribution components. The analysis shows that, between 1983/84 and 1996, poverty in Cameroon appears to be a significant phenomenon which affects rural areas more severely than urban areas. This result suggests that rural areas, where the majority of the poor reside, should be the primary beneficiaries of efforts for fighting against poverty. Moreover, the analysis of the link between growth, poverty and income inequality according to Kakwani's (1993) method indicates that in urban areas, the absolute values of expenditure elasticities are clearly higher than unity whatever the poverty measure. Furthermore, poverty elasticities relative to expenditures and to the Gini index are higher in urban than in rural areas thus indicating the higher social fragility of urban areas with respect to economic growth and changes in income inequality. Therefore, the dynamic decomposition results of changes in poverty in growth and redistribution effects confirm the fact that the increase in poverty over the 1983/84-1986 period was due the adverse effect of the contraction in economic activity on growth which was higher than the redistribution effect and thus was more favourable to the poor. The results of this study thus improve our understanding of the nature of poverty in Cameroon and may help in the design of appropriate policies to alleviate this phenomenon.
The chapter analyses the growth performance of the Cameroonian economy from independence in 1960 to date, and uses this as a background for the analysis of poverty, inequality, and non-monetary outcomes. The analysis of poverty and inequality takes data from three comparable and nationally representative Cameroonian household surveys that were conducted in 1996, 2001, and 2007 respectively; these are complemented by an analysis of the four demographic health surveys conducted in 1991, 1998, 2004, and 2011. This analysis puts more emphasis on spatial differences. Some policy recommendations are given, generally focusing on the need for stronger and sustainable economic growth and for greater policy attention to be paid to poverty reduction, especially in disadvantaged regions of the country.
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