Determinants of Inequality in Cameroon: A Regression-Based Decomposition Analysis

Abstract

This paper applies the regression-based inequality decomposition approach to explore determinants of income inequality in Cameroon using the 2007 Cameroon household consumption survey. The contribution of each source to measured income inequality is the sum of its weighted marginal contributions in all possible configurations of sources as sanctioned by the Shapley value decomposition rule. Regressed-income sources attributable to education, health, urban residency, household size, fraction of active household members, working in the formal sector and farmland ownership are the main determinants of household income inequality in that order. These results have policy vocation that policy-mix that simultaneously combine efforts targeting human capital consolidation with other policy outlets will have an overall higher effectiveness for both total welfare enhancement and human capital development than when implemented alone.

Keywords: Decomposition, Inequality, household Economic well-being and Cameroon

BOJE: Botswana Journal of Economics, 11(15), 2-20