No.35 Evidence from Spatial Correlation of Poverty and Income in Kenya

  • #Working Papers

Using the district-level data, we found that even in a relatively poor country like Kenya, ethnic diversity is associated with better economic outcomes at local level. However, we found that income spillovers depend on ethnic similarity. This suggests the influence of ethnic bias through which ethnic diversity may undermine economic efficiency at the national-level, as many crosscountry regressions have pointed out. This result implies, for policy making, that the question of interregional transaction costs cannot be narrowly focused on problems of transportation infrastructure but it is also related with ethnic divisions in African context.

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Author
Nobuaki Hamaguchi
Date of issuance
November 2011
Related areas
  • #Africa
Topics
  • #Economic Policy
Research area
Economic Growth and Poverty Reduction
Research project