Rising wealth in Kenya: is everyone benefitting?

Looking at some data on socio-economic status (SES) from two regions of Kenya, I was able to compare current levels of household wealth with those of 2007 in the same households.

We measured SES using a method common to studies of developing countries. An accounting of specific material goods including ownership of radios, TVs and bikes along with type of water source, toilet is performed. We then use multiple correspondence analysis to assign weights to each item as they appear in the data set and a total score is calculated for each household (Filmer and Pritchett, 2001 though they use PCA). Each score (ideally) represents the relative level of wealth of each household.

Kenya’s GDP has been increasing rapidly since 2001. During my five years of travelling to this country, I’ve seen the place transform itself. There are more goods on the shelves, people look better, kids die less and women have fewer children. HIV and malaria are down and people are busier. It’s worth noting that Kenya has no real natural resources; its economy is mostly based on a well developed domestic market economy and agricultural exports.

The question, however, is whether these economic gains are being felt by everyone equally. To test this, I compared data from 2007 and 2015 to see if all households experienced an increase in wealth during this period.

I made the graph above. Assuming I’m interpreting the graph correctly, this would suggest that while wealthier households in 2007 consistently continue to be wealthy in 2015, the relationship for poor households is scattered. Some households are doing better, while other may have experience no change, while others may be poorer in 2015.

Clearly, no matter how one interprets these results, we should be explore what types of households might be falling behind, or experience no gains at all.