50 CHAPTER 5
respectively. Moreover, the reduction in the Gini coefficient for any one welfare measure is greater in the case of beneficiaries than for any nonbeneficiaries. The last two columns in the table show the percentage of the household observations that have negative incomes. Overall it is quite high, which is why it is inadvisable to rely solely on the Gini coefficient based on normalized income without considering the coefficients based on the other two mea- sures. However, note that the share of negative incomes is similar across par- ticipation categories, suggesting that, although this Gini is downward biased, the bias can be expected to be similar across the participation categories, and it is the inequality comparison across these that is relevant. Despite the imperfection of the income and consumption measures for calculating the Gini coefficient, the robustness of the results across measures and across definitions of nonbeneficiary strongly suggests that the project contributed to the reduction of inequality. This finding is consistent with the results of our productive asset analysis, which showed that the value of group-owned productive assets increased more significantly both in terms of percentage increase and ATT among the poorest asset tercile than among the middle and upper terciles. However, the results are not consistent with the income results in which we observed no significant impact of Fadama II on income for the poorest asset tercile for the matched sample. We also investigated the impact of Fadama II on income distribution using the coefficient of variation. The income results are more reliable than the Gini coefficient results, which were computed using consumption expendi- ture data. Such consumption data are less reliable than the income data, because they were collected by asking respondents to recall their consump- tion expenditures over a span of two years. Table 5.11 reports the changes in the coefficient of variation before and after the start of Fadama II. The
Table 5.11 Coefficient of variation of household income before and after Fadama II
Treatment type
All households (n = 3,750) FII beneficiaries (n = 1,281)
Nonbeneficiaries in FII LGAs (n = 1,240) Nonbeneficiaries outside FII LGAs (n = 1,229)
Before FIIa
3.28 2.00 0.65 0.66
Coefficient of variation After FIIa
2.78 0.90 0.66 0.77
Change (%) –15.2 1.5
–55 16.7
Note: FII, Fadama II; LGA, local government authority. a“Before FII” indicates the year before Fadama II started (October 2004–September 2005). “After FII” indicates the year after the project started (October 2005–September 2006).
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