HOUSEHOLD INCOME INEQUALITY AND FOOD INSECURITY IN GHANA

Abstract

Despite the rise in Ghana’s GDP per capita, food insecurity is still a challenge. Data from the World Income Inequality Database show that the consistent rise in Ghana’s GDP per capita income is accompanied by a rising income inequality trend. The rising income inequality is attributed to rising incomes of only the wealthy classes, leaving more people in economic crises. While several determinants of household food insecurity have been examined, the role of household income inequality is missing in the Ghanaian context. This study used data from the seventh round of the Ghana Living Standards Survey to examine the effect of household income inequality on food insecurity. Since household income inequality can be decomposed into intra- and inter-household components, this study considers the effects of intra- and inter-household income inequalities on food insecurity. 2,737 households were used for intra-household analyses since they have at least two income sources which satisfy inequality estimation. Also, 749 communities were used for inter-household analyses due to successful identification and matching of household characteristics. Both intra- and inter-household income inequalities were calculated using the Gini index. Food Insecurity Experience Scale, Dietary Diversity Score and Food Expenditure per capita were used as food insecurity indicators.S The Atkinson, Mean Log Deviation and Theil indices were used to assess the extent to which intra- and inter-household income inequality contribute to overall income inequality. Also, an Extended Ordered Probit with Endogenous Covariate model was employed to examine factors influencing intra- and inter-household income inequalities and the effects of both household income inequality components on food insecurity simultaneously. The results show that intra-household income inequality contributes about 14 to 22% to overall income inequality while inter-household income inequality contributes about 78 to 86%. While labour employment, university degree, skills, Social Security and National Insurance Trust contribution, and internal transfer reduce intra-household income inequality, contributing household employees, remittance, miscellaneous income as well as social exclusion increases it. Inter-household income inequality increases with more Livelihood Empowerment against Poverty receiving, socially excluded and discriminated households but reduces when more households participate in labour markets and when more household heads are employed. The results also show that both intra- and inter-household income inequalities increase food insecurity at the household and at community levels respectively. In addition to income inequality, household size and ownership of residence also increase food insecurity. However, income and assets per capita, remittance, university degree, employment of household heads, community population, urbanisation, availability of financial institutions, and public transport passage via community reduce food insecurity. Based on the findings, it is suggested that government and private development agencies should assist in providing favourable conditions that will increase tertiary school enrollment and labour employment opportunities. It is also suggested that community leaders and social activists should ensure that individuals have equal rights to participate in social activities and use public services without discrimination.