Income Distribution in Tanzania: An Analysis of Trends
Semboja, Joseph Josaphat
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https://hdl.handle.net/2142/70744
Description
Title
Income Distribution in Tanzania: An Analysis of Trends
Author(s)
Semboja, Joseph Josaphat
Issue Date
1983
Department of Study
Economics
Discipline
Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Business Administration, General
Abstract
By using the Gini coefficient, the study first measures the degree of household income inequality in Tanzania and demonstrates that inequality rose between 1969 and 1976/7. Second, the study attempts to explain changes in the level of income inequality in Tanzania. It is shown that urban household income inequality was higher with property income than without. Moreover, urban household income inequality rose faster over time with property income than without. In the rural areas, partly due to the small proportion of property owners and also due to the inability of this group to earn significantly higher incomes than the rest of the rural population, the impact of property income to household income distribution was fairly minimal.
The study also demonstrates that in the urban areas household income inequality rose due to rising rates of inflation. In the rural areas, partly due to the role of subsistence consumption and also due to the composition of the consumption baskets of different income groups, the redistributive impact of inflation was insignificant.
Finally, it is demonstrated that, even though the Tanzanian personal income tax structure is progressive, its redistributive impact is reduced by rising rates of inflation. On this basis, it is shown that the formulation of an effective redistribution policy requires that tools of redistribution should be considered in the form of a package. A redistribution policy which treats individual redistributive factors as independent and sufficient redistributive tools is inadequate and may produce undesirable results.
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