I.4    
 

Average per capita expenditure

   
 

This map shows the village average per capita expenditure. As with the index of inequality, this measure takes into account the economic well-being of the whole population, poor and rich, unlike the measures of poverty, which focus on only those below the poverty line.

We expect that as the average per capita expenditure rises, the poverty rate will fall. Nonetheless, it is surprising how similar this map is to the map of poverty incidence, or in other words, how closely the poverty rate depends on the average per capita expenditure of the village. Particularly among the poorer villages, the relationship between the two is quite close. This suggests that the incidence of poverty in a village is to some extent a function of the average level of per capita expenditure in the village and that the degree of inequality within a village plays a minor role in determining the poverty rate.

It is widely believed in the Lao PDR and other countries that as incomes rise, the gap between the poor and rich widens. The data presented here confirm that view to some degree. But the relationship between inequality and per capita expenditure is not a simple positive relationship. Many low-income areas also have a high level of inequality. In fact, the districts with the highest levels of inequality tend to be the relatively poor districts with per capita expenditure below 150 million kip/month. Furthermore, low-income areas have a wider range of levels of inequality, while high-income districts seem to converge toward a Gini coefficient of around 0.3 (Map I.3).

 

 

 


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