Changing Patterns of Wealth Distribution: Evidence from Ghana

Abstract

A largely unexplored feature of structural transformation is the change in the composition of an economy’s asset holdings. In most poor economies, assets are concentrated in land. In rich economies, physical and human capital are more important. This paper focuses on the changes in the composition of household wealth and the share of assets owned by women in Ghana over two decades of relatively rapid growth and significant structural changes. We find that land’s share of household portfolios decreased and the share of financial assets increased. Women’s share of land, savings and business assets rose over the period.

Acknowledgements

The authors wish to thank Carmen Diana Deere and Douglas Gollin for their comments on this paper and Jana Bischler for excellent research assistance.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Note that urbanisation is not necessarily the same as a change in the structures of production; in principle, it is possible for movements out of agriculture to take the form of rural non-farm activities.

2. In 1970, 54 per cent of employed women and 59 per cent of employed men worked in the agriculture sector. The share of employed women and men employed in the wholesale and retail trade was 26.1 per cent and 3.9 per cent respectively.

3. We do not use the first two rounds of the GLSS survey because the questions are different enough to make the data less comparable across time.

4. The GAGP has detailed information on indebtedness for a maximum of two adult members of the household.

5. We tried several methods to deal with outliers, including winsorizing the data, but the patterns did not substantially change.

6. The housing price index produced by the Ghana Statistical Service, which includes utility prices increased by 42 per cent, 27 per cent and 64.3 per cent in 2001, 2002 and 2003 respectively compared to 91-day Treasury bill rates of 29 per cent, 26 per cent and 20 per cent.

7. Welfare is measured as real household consumption expenditure per adult equivalent based on consumption data collected through the GAGP.

8. Between 1986 and 1987, the capital city, Accra, expanded by 171.9 square miles (Yeboah, 2003).