Citation

Discussion Paper Details

Please find the details for DP2433 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Inequality And Group Participation: Theory And Evidence From Rural Tanzania

Author(s): Eliana La Ferrara

Publication Date: April 2000

Keyword(s): groups and markets, Inequality, Participation, Social Capital and Tanzania

Programme Area(s): Public Economics

Abstract: This paper investigates the determinants of group membership, and in particular the effect of income inequality on individual incentives to join economic groups. Drawing on a simple model, we show that an increase in inequality has an ambiguous effect and that the type of access rule (open versus restricted access) is key in determining what income categories are represented in the group. Furthermore, the shape of the income distribution can be crucial to determine whether increased inequality leads to more or less group participation. Using survey data from rural Tanzania we find that inequality at the village level has a negative impact on the likelihood that the respondents are members of any group. This effect is particularly significant for relatively wealthier people, both when relative wealth is 'objectively' measured, and when it is 'subjectively' defined. However, when we disaggregate groups by type of access rule, we find that inequality decreases participation in open access groups when there are wide disparities at the bottom of the distribution, while it increases participation in restricted access groups when the disparities are around the middle and top part of the distribution. Finally, we assess the impact of inequality on various dimensions of group functioning.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2433

Bibliographic Reference

La Ferrara, E. 2000. 'Inequality And Group Participation: Theory And Evidence From Rural Tanzania'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2433