dynamics and evolution of welfare are assessed in Section IV: the results suggest rising urban poverty accompanied with rapidly increasing income inequality, persistence of large urban-rural bias, continued large contribution of rural areas to overall national poverty, and changes in the spatial poverty maps which suggest that the southern regions might have benefited from growth. The dynamics of poverty also reveal persistence of large differences across SEG. Particularly, subsistence farmers and export crops continue to account for the largest share of poor, despite the relative decline of headcount for the export farmers. In contrast, wage income earners from private sectors seem to have benefited from growth. Section V investigates the direction and strength of association between selected determinants of income inequality, parental education level, household ownership of key assets and household welfare. Results suggest a strong and positive association which is relatively stable over time with a large proportional variance of household welfare explained by these determninants. The test of significance of overtime changes in the distribution of welfare across geographical regions and SEG implemented in Section VI fails to reject the null hypothesis of no association between overtime poverty maps, suggesting lack of concordance in the distribution of welfare across geographical regions overtime, and significance of changes in the spatial poverty map. A test of overtime association between distributions of income across SEG rejects the null hypothesis in favor of the alternative, suggesting concordance in rank ordering. Section VII provides concluding remarks and policy implications.

# **II. The Data**

The study is based on the last two household priority surveys, Enquete Prioritaire I (EPI) and II (EP2), undertaken by the Burkina Faso "Institut National de la Statistique et de la Demographie" (INSD). These surveys are very similar in the scope of data collection, sampling design and coverage: they are nationally representative and the sample selection uses a two-stage stratified random sampling in both design.<sup>6</sup> Individual and household level information is collected on a relatively large sample: more than 8,600 households in the first, and about 8,500 in the second round. This relatively large cc,verage allows a spatial analysis of welfare which reflects the country administrative and economic regions.<sup>7</sup> The similarity in the sampling and questionnaire design also facilitates inferences on poverty trends and over time comparisons. The number of consumption items sampled is more disaggregated in the second round to reflect changes in the composition of household consumption baskets.<sup>8</sup> Such a disaggregation produces a large number of consumption items and sub-aggregates and may result in a much higher household total expenditure aggregate, see Deaton and Grosh (2000). However, by focusing on distributional shifts, and less on absolute levels of wealth, the similarity in the design can allow sound inferences on welfare.

Although these surveys collect information on household income and expenditures, we use

> 6 Twenty strata were formed, corresponding to 10 rural and 10 urban areas. Enumeration areas (Zones de denombrement) were sampled in the first stage with probability proportional to the size of each unit; 20 households were systematically sampled in each enumeration area (ZD) in the second stage with fixed probability.

> 7 Targeting public resources on the basis of this latter survey may even be more effective, in light of the modifications made to the sampling frame in the second round to reflect the changes allowed by the last population census.

8 The number of consumption items sampled between the first and second round increases from 46 to 65; this coverage remains relatively low in comparison with expenditure components of more comprehensive Integrated Surveys (LSMS), and may cause the aggregate distribution of income to bias, see Fofack (2000).

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