|**Table 2: Panel sum**|**mary stat**|**# b**<br>**istics: **|**enchm**<br>**Numb**|**ark yea**<br>**er of c**|**rs**<br>**ountri**|<br>**# countri**<br>**es by panel du**|<br>**es observed in**<br>**ration**|
|---|---|---|---|---|---|---|---|
|**Regions**|**Total**|**1**|**2**|**3**|**4**|**1993 & 2008**|**1998 & 2008**|
|**Africa**|44|13|8|15|8|19|17|
|**Income level**||||||||
|**Lower**|23|7|2|11|3|10|8|
|**Lower middle**|14|4|3|3|4|7|6|
|**Upper middle & high income**|7|2|3|1|1|2|3|
|**Conflict**||||||||
|**Non‐fragile**|30|5|8|11|6|13|14|
|**Fragile**|14|8|0|4|2|6|3|
|**Natural resources**||||||||
|**Non‐resource rich**|28|5|6|12|5|13|13|
|**Resource rich**<br>_Notes: The last two columns allowfor_|16<br> _gaps in the_|8<br> _panel. E_|2<br>_xcludi_|3<br>_ng bench_|3<br>_markye _|6<br>_ar 2012._|4|

# **IV. The African Distribution of Consumption Expenditure and Its Inequality**

Figure 1 shows the African distribution of consumption expenditure and how it evolved over time.<sup>23</sup> It is a unimodal distribution which looks approximately lognormal although it has a long right-hand tail. As shown by the rightward movement of the distribution, there was moderate growth between 1998 and 2003 (mean consumption per capita grew at 4% per annum), which was also illustrated by a positive growth incidence curve over this period (see Figure 4 below). Between 2003 and 2008 incomes declined (by 1.2% per annum) with the possible exception of the top. In the early 1990s, mean consumption per capita was around 20% higher in Africa than East Asia (2011 PPP US$ 876 per year in 1992). But between 1992 and 2007, mean consumption grew at an annual rate of 6% in East Asia, so that the African mean was only 60% of the East Asian mean in 2007 (2011 PPP US$ 2,102 per year).

Table 3 shows the main set of results on the African-wide inequality of consumption expenditure. Compared with within-country inequality in the region, the Gini index of the Africa-wide distribution of consumption expenditure is high at between 52% and 56% across the benchmark years (Table 3, Panel A).<sup>24</sup> For example, in benchmark year 2008 the average within-country Gini is 45% (Table 3, Panel D), and there are only four countries that have a Gini in excess of the African

> 23 Using the Kolmogorov-Smirnov test, we can reject the equality of distributions at the 0.5% significance level for all combinations of benchmark years. However, this needs to be interpreted carefully as the data are derived from combining various surveys instead of a single sample (see the discussion on standard errors below).

> 24 Pinkovskiy and Sala-i-Martin (2014) estimate a substantially higher Gini index which _decreases_ over time. For example, they report a Gini of around 66% in 1993 (64% in 2008) [values are read off from their Figure 21], compared with 52% in 1993 (56% in 2008) for our estimates. Furthermore, their paper reports 34% in 1990 (21% in 2011) of the regional population living below $1.25 (2005 PPPs), compared with 57% in 1990 (47% in 2011) for PovcalNet (accessed November 16 2015), which uses methods similar to our paper. While there are a number of methodological differences, the most important seem to be the use of GDP per capita and imputation of income inequality (from consumption surveys) by Pinkovskiy and Sala-i-Martin. See footnotes 8 and 44 for a discussion of why we do not use GDP per capita.

8