Intra-household income inequality and poverty in a small developing economy

Ignoring consumption inequality between individuals within a household is shown to not only underestimate the Gini coefficient and poverty measures but these vary considerably over different income groups even in a small island state like Fiji. Interestingly, the Kuznets curve for intra-household inequality is absent and to our knowledge the paper provides the first attempt in determining the factors that influence intra-household inequality. It was found that variation in the age of family members only affected inequality in low-expenditure groups while total assets affected inequality in the mid-level-expenditure group. Age variations arise due to the existence of intergenerational family structure among the poorer households and strong affinity towards asset accumulation among the middle class could have harmful effects on the development of children and the welfare of the weaker members within such families. These intra-family distributional problems can be addressed through targeted redistributive policies to provide additional resources and enhance family cohesion. © 2011 Taylor & Francis.