Are Neighbors Equal?
Estimating Local Inequality in Three Developing Countries
Based on a statistical procedure that combines household survey data with population census data, this chapter presents estimates of inequality for three developing countries at a level of disaggregation far below that allowed by household surveys alone. The authors show that while the share of within-community inequality in overall inequality is high, this does not necessarily imply that all communities in a given country are as unequal as the country as a whole. In fact, in all three countries there is considerable variation in inequality across communities. The authors also show that economic inequality is strongly correlated with geography, even after controlling for basic demographic and economic conditions.