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I 6 TRENDS IN INCOMES AND WELFARE OF VARIOUS INCOME GROUPS In thi s chapter w e will integrate much of the structural analysi s o f the previou s chapters to assess the impact of the recent stabilization and structural adjustmen t measures on the poor, as well as on other segments of the population. To the extent possible, we shall try to differentiate impact s by functional incom e groups. The intertemporal analyses of incomes that have been done up to now are very few. Bevan et al. (1988; reproduced in Bevan et al. 1990) used information fro m household survey s conducted i n 1969 , 1976/77, 1979/80 , 1982/83 , and 198 4 to assess trends in rural an d urban incomes in Tanzania during the 15-yea r perio d of th e "Nyerer e experiment. " The y foun d a n increas e i n rura l pe r capit a rea l incomes betwee n 196 9 an d 1976/77 , a very substantia l dro p between 1976/7 7 and 1979/80, and a very small, further dro p in 1982/83. For urban per capita real incomes, thei r calculation s showe d a dro p o f 1 5 percen t betwee n 196 9 an d 1976/77, and a huge drop of more than 5 0 percent between 1976/7 7 an d 1984 . Their analysis is the only one available that spans such a long period . Recently, Collier and Gunning (1989) examined changes in rural and urban average rea l income s fo r th e perio d 1983-1989 , an d the y foun d tha t th e 146 Trends in Incomes and Welfare of Various Income Groups 14 7 declines indicate d by earlier studies have been arrested, but no substantia l real income increase s hav e occurred i n rural areas. However, th e standar d of livin g appear s t o hav e improved , primaril y becaus e o f th e increase d availability o f consume r goods , whic h enhance s welfar e b y improvin g consumer choice . In th e following , w e wil l reexamin e th e abov e hypothese s an d provid e some further analysis of differential incom e changes during the recent period. In the next section we examine the previous analyses of income declines over the post-Arusha-declaration perio d an d find tha t the earlier conclusions ar e not supported by other data. We then outline in the next section a theoretical model fo r tracing the real welfare o f different type s of households. We the n apply this method an d show tha t the poor do not see m to have been signifi cantly affecte d durin g or after the crisis. HOW REAL IS THE DECLINE IN RURAL AND URBAN INCOMES DURING THE "NYERERE EXPERIMENT"? The paper by Bevan and his colleagues (1988 ) cam e to its strong conclusion s by examining the structure of income as well as changes in the real value of the various components of income. However, we will show that their results depend heavily o n som e particula r definitions , an d that withou t these , th e picture i s substantially altered . Their first assertion concerns the structure of rural incomes circa 198 3 by income quintiles, based on the results of a rural survey conducted in 1982/83, which shows that the shares of income derived from cash crop sales are larger for poore r households . However , thi s resul t i s strongl y influence d b y th e inclusion i n total income of livestock, which , as was discussed in Chapter 4, is define d differentl y acros s surveys : whethe r o r no t asse t valuation s ar e included can strongly influenc e th e results. In Tabl e 5 0 w e reconstruc t thei r reporte d figure s o n incom e an d share s leaving ou t the livestock incom e tha t appears t o create biases . The table, in the lower section, indicates that among nonlivestock income sources, the rural poor have a very high share of income from crops (especially food), while the rich have a higher share of income from own-business. The assertion of Bevan et al . tha t cas h crop s ar...


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