Rural versus Urban Household Consumption and Income Inequality in Tanzania

Abstract

The current study analyses household consumption and income inequality using two levels; varying-intercept and varying-slope  hierarchical linear model (HLM). The findings revealed higher levels of average consumption and income among urban as compared to  rural households. On average, urban households face higher inequality in both income and consumption than rural households.  Consumption dispersion is also much closer to income dispersion in rural stratum than urban strata. The novelty of the current study is  the analysis of strata estimates deviations from overall National Panel Survey (NPS) sample estimates using two levels HLM. However, the application of more than two levels HLM that includes other socio-economic factors will significantly impact the methodology.