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Consumption expenditure

Household welfare is highly correlated with income. Household incomes are not easy to measure, because they are not always a true reflection of actual incomes, but household consumption expenditure is usually a reliable indicator. Individual expenditures have historically been shown to be correlated with income level. Household surveys have therefore traditionally captured data on expenditures as a proxy for estimating incomes. Consumption expenditure on a determined food basket is used to estimate the poverty line.

Household consumption expenditure in Table 3.1 reveals inequalities both nationally and across rural and urban areas. For purposes of analyzing inequality, we divide the population into quintiles, each representing 20 percent of all the households in Kenya, from lowest to highest expenditures. The consumption expenditure share of the fifth quintile with the highest expenditures above KSh7,200 is 3.6 times more than that of the first quintile with expenditures below KSh 1,440. The disparities in expenditures are more pronounced in urban areas compared to rural areas.

The variations in consumption expenditure are more pronounced in urban areas with expenditures in the fifth quintile at least 121 times more than the first quintile compared minimal differences in rural areas. However, when we look at the population that is in each decile across areas, there are big disparities between rural and urban areas; 44.6 percent of the total rural population is in the first quintile, while only 2.6 percent of urban population is in the first quintile. This is in comparison to the fifth decile with populations of 1.5 percent and 34.1 percent in rural and urban areas, respectively. This shows that there are large income differentials between urban and rural areas.

When we separate the rural and urban areas and look at inequality within each, we see that it is not all that different as illustrated on Table 3.2. In rural areas, the ratio of the top quintile to the bottom quintile is 6.4 while that of urban areas is 6.6.

 Inequalities in consumption expenditure are pronounced across counties (see table 3.1). Nairobi,  Mombasa and Kiambu counties display significant differences with the 5th quintile spending more than the first by 691 times in Nairobi, 75 in Mombasa and 20 Kiambu.  These three counties show a skewed distribution of expenditures compared to the other seven top ranked counties. In eight of the bottom 10 counties at least 50 percent of their population is in the bottom 1st quintile with expenditures below KSh 1,440 compared to only 0.6 percent of the population in Nairobi County.

Table 3.1: National and county monthly expenditure deciles distribution* by share, proportion of households, and population.

 

CONSUMPTION EXPENDITURE SHARE PER QUINTILE

NUMBER OF INDIVIDUALS PER QUINTILE

 

NUMBER OF HOUSEHOLDS PER QUINTILE

 

1st

2nd

3rd

4th

5th

1st

2nd

3rd

4th

5th

 

1st

2nd

3rd

4th

5th

 

Name

Ksh. Below 1,440

Ksh. 1,441-2,840

Ksh. 2,841-3,880

Ksh. 3,881-7,200

Ksh. Above 7,200

Ksh. Below 1,440

Ksh. 1,441-2,840

Ksh. 2,841-3,880

Ksh. 3,881-7,200

Ksh. Above 7,200

Total

Ksh. Below 1,440

Ksh. 1,441-2,840

Ksh. 2,841-3,880

Ksh. 3,881-7,200

Ksh. Above 7,200

Total

Kenya

              9.8

            13.6

            17.8

            23.1

            35.7

            31.5

            23.5

            18.9

            14.4

            11.7

              37,565,589

            20.0

            20.0

            20.0

            20.0

            20.0

          8,469,875

Rural

            21.1

            17.0

            29.5

            26.2

              6.2

            44.6

            21.1

            20.5

            12.2

              1.5

              25,843,775

            31.6

            20.3

            24.3

            20.4

              3.5

          5,239,316

Urban

              0.5

            10.8

              8.0

            20.5

            60.3

              2.6

            28.7

            15.3

            19.3

            34.1

              11,721,814

              1.3

            19.5

            13.1

            19.4

            46.8

          3,230,559

Top 10 counties

Nairobi

              0.1

              6.2

              6.6

            17.9

            69.1

             0.6

          19.2

          15.3

          20.2

          44.7

             3,068,835

             0.3

          15.5

          13.1

          19.6

          51.5

          968,202

Mombasa

              0.8

            10.8

              8.0

            20.1

            60.3

             5.0

          27.8

          14.8

          17.9

          34.4

                918,681

             3.6

          22.8

          13.4

          18.4

          41.8

          265,912

Kiambu

              2.2

              7.6

            11.1

            35.2

            44.0

             9.6

          17.9

          17.2

          31.4

          23.8

             1,601,101

             4.7

          11.5

          14.6

          32.0

          37.2

          456,106

Kisumu

              4.9

            14.3

            12.1

            16.9

            51.9

          17.7

          30.9

          16.6

          12.7

          22.1

                951,587

          11.0

          26.9

          18.7

          15.3

          28.1

          221,792

Lamu

              5.0

              7.9

            14.0

            27.6

            45.6

          28.1

          15.1

          17.7

          21.9

          17.2

                   98,646

          24.4

          11.5

          15.3

          23.9

          24.9

             21,026

Nakuru

              5.0

            14.1

            20.0

            27.5

            33.5

          16.1

          26.5

          24.6

          19.3

          13.5

             1,562,625

             8.5

          18.2

          21.8

          25.3

          26.2

          401,448

Machakos

              6.0

            15.6

            15.9

            26.7

            35.7

          20.0

          28.9

          19.2

          18.1

          13.8

             1,084,129

          13.0

          21.8

          18.5

          21.3

          25.5

          261,791

Uasin-Gishu

              5.6

            15.1

            23.4

            26.0

            29.9

          17.0

          27.2

          26.9

          17.6

          11.3

                867,712

             9.4

          19.3

          24.3

          23.0

          24.1

          197,981

Nyeri

              5.6

              9.6

            20.8

            36.2

            27.9

          18.5

          19.2

          24.3

          27.1

          10.9

                678,735

          10.3

          14.3

          22.9

          34.1

          18.2

          199,439

Kajiado

              7.0

            14.3

            17.6

            26.9

            34.2

          22.0

          26.6

          20.7

          17.9

          12.8

                675,955

          13.0

          20.2

          19.1

          21.9

          25.8

          170,063

Median county

Kisii

            15.0

            18.7

            21.7

            16.2

            28.4

          36.7

          27.9

          19.3

             8.8

             7.3

             1,139,552

          27.9

          27.1

          22.4

          11.9

          10.7

          236,416

Bottom 10 counties

Narok

            15.5

            21.9

            34.3

            19.6

              8.7

          31.4

          29.6

          26.6

          10.0

             2.3

                838,624

          20.5

          25.4

          29.8

          17.9

             6.5

          163,721

Kitui

            24.0

            17.2

            23.3

            22.8

            12.6

          50.2

          20.5

          16.3

          10.0

             3.0

                979,563

          38.1

          19.6

          19.3

          15.7

             7.3

          198,933

Bomet

            19.7

            21.4

            29.0

            20.0

            10.0

          39.4

          27.0

          21.6

             9.4

             2.6

                721,873

          27.9

          24.3

          24.6

          17.3

             5.8

          141,164

Makueni

            24.9

            18.5

            24.7

            20.5

            11.4

          50.0

          21.8

          16.8

             8.9

             2.5

                873,416

          36.9

          20.5

          19.7

          15.3

             7.5

          186,047

Marsabit

            32.9

            30.0

            11.8

            11.4

            13.8

          58.1

          28.8

             7.0

             3.6

             2.5

                288,272

          50.2

          30.0

             9.3

             5.1

             5.4

             56,536

Samburu

            33.3

            26.2

            18.5

            10.9

            11.1

          56.1

          26.6

          11.3

             3.8

             2.3

                220,978

          43.2

          27.9

          16.4

             7.1

             5.5

             45,353

West Pokot

            33.0

            24.0

            23.8

            13.0

              6.2

          55.0

          24.8

          14.1

             4.9

             1.3

                485,464

          39.3

          26.6

          20.2

          10.1

             3.8

             78,428

Mandera

            48.3

            28.7

            11.0

              6.9

              5.1

          72.1

          20.5

             4.9

             1.7

             0.8

                927,605

          67.3

          21.8

             6.4

             2.6

             1.8

          109,602

Turkana

            57.0

            25.5

              5.9

              5.7

              5.9

          77.6

          17.6

             2.6

             1.3

             0.9

                801,346

          67.3

          21.8

             4.8

             3.0

             3.0

          106,004

Wajir

            52.4

            24.9

            13.9

              5.7

              3.1

          74.9

          17.5

             5.7

             1.5

             0.4

                522,830

          65.6

          20.9

             9.2

             3.0

             1.4

             60,602

 

*The total may not add up to 100 for some due to aggregation

NB: Counties have been ranked by proportion with highest ratio between 1st and 5th quintile

 

 

Table 3.2: Average rural and urban consumption expenditure deciles

RURAL HOUSEHOLDS

Quintile

Expenditure share

% of Households

% of Population

Ksh. 0-1245

6.5

20

30.5

Ksh. 1246-1583

9.8

20

23.4

Ksh. 1584-3133

17.0

20

19.3

Ksh. 3134-4199

24.9

20

15.6

Ksh. 4200 +

41.7

20

11.1

Total/Number

100

5,239,316

25,843,775

URBAN HOUSEHOLDS

Quintile

Expenditure share

% Households

% of Population

Ksh. 0-2433

5.9

20

30.2

Ksh. 3434-3163

10.7

20

22.7

Ksh. 3164-6848

19.0

20

19.3

Ksh. 6849-9521

25.0

20

15.8

Ksh. 9252-11683

39.2

20

12.0

Total/Number

100

3,230,559

11,721,814

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