48 CHAPTER 5


Table 5.9 Change in income from spillover effects of Fadama II among nonbeneficiaries in Fadama II LGAs (matched sample)


Characteristic ATTa Nonbeneficiaries in versus those outside Fadama II LGAs


Agroecological zone Humid forest Moist savannah Dry savannah


Gender of household head Female Male


Asset tercile Tercile 1 (poorest) Tercile 2


Tercile 3 (wealthiest) 15,309


18,931 42,137* 13,748


7,700 17,073


15,969 37,186 –6,117


Change in income (%)


18


72 31 11


30 16


17 36


–12


Notes: * indicates significance at the 10 percent level. ATT, average effect of the treatment on the treated; LGA, local government authority.


aATT is computed as [E(Y1|p = 1) – E(Y0|p = 0)] – [E(Y0|p = 1) – E(Y0|p = 0)].


Such spillover effects enhance the provision of public services (such as exten- sion and roads), but they encourage free riding, which could compromise the incentive to pay matching funds for such services.


Impact of Fadama II on Income Distribution


Fadama II targeted the poor and vulnerable groups, such as women, youth, the elderly, people with HIV/AIDS, and the physically challenged. Holding other factors constant, this targeting is likely to reduce income inequality. In addition to comparing the value of productive assets and income across gen- der and asset terciles, we further analyzed the achievements of this targeting by examining the change in inequality over the first year of the project. As discussed in Chapter 4, we used three measures to determine the Gini co- efficient: Consumption expenditure, income, and normalized income (adjust- ing negative incomes to zero). In the context of our data, there are deficien- cies with each of these underlying welfare measures as discussed earlier, which is a motivation to present all three and assess whether the general trends with regard to inequality and project participation are robust. Table 5.10 shows the three inequality measures before and after project start for project beneficiaries and for the three categories of nonbeneficia- ries also used in earlier analysis. The results show that the Gini coefficient of Fadama II beneficiaries decreased by 9, 24, and 4 percent when using consump- tion expenditure, income, and normalized income as the welfare indicator,


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