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Enhancing household consumption and reducing inequality are among the fundamental goals of
many developing countries. The purpose of this study therefore is to disaggregate household consumption
expenditure into food and non-food and, thus, decompose inequality into within- and between-groups.
The study adopts generalised entropy (GE) measures. Second, the
study uses regression-based inequality decomposition to ascertain the determinants of inequality in food and
non-food expenditure using household demographic and socioeconomic characteristics as covariates.
The results show that non-food expenditure is the major source of inequality in household
consumption expenditure in both urban and rural areas with inequality coefficients of above 0.6 compared to
about 0.4 for food expenditure. The decompositions also show that within-group inequalities for non-food and
food expenditure are, respectively, 0.97 and 0.365 using the Theil index, while between-group inequalities for
non-food and food are, respectively, 0.016 and 0.035. Furthermore, the regression-based inequality
decompositions show that variables such as living in rural areas, household size, household dwelling and
household dwelling characteristics account for the significant proportion of inequality in food and non-food
expenditure.
The policy implication of the findings, among others, is that policies should focus on
addressing inequality within rural and urban areas, especially with respect to non-food expenditure than in
inequality existing between urban and rural areas. These non-food expenditures include expenditure in
education, health, energy, accommodation, water and sanitation.
