Note: We would like to thank Morten Jerven, Derek Blades, two anonymous referees, and participants at the IARIW-SSA Conference in Cape Town, the World Economic History Congress in Cape Town, and the German Development Economics Association Meeting in Bonn, for helpful comments and suggestions.
An African Growth Miracle? Or: What do Asset Indices Tell Us About Trends in Economic Performance?
Article first published online: 20 JAN 2013
© 2013 International Association for Research in Income and Wealth
Review of Income and Wealth
Special Issue: Measuring Income, Wealth, Inequality, and Poverty in Sub Saharan Africa: Challenges, Issues, and Findings
Volume 59, Issue Supplement S1, pages S37–S61, October 2013
How to Cite
Harttgen, K., Klasen, S. and Vollmer, S. (2013), An African Growth Miracle? Or: What do Asset Indices Tell Us About Trends in Economic Performance?. Review of Income and Wealth, 59: S37–S61. doi: 10.1111/roiw.12016
- Issue published online: 4 SEP 2013
- Article first published online: 20 JAN 2013
- asset index;
- GDP growth
Using changes in the possession of household assets over the past 20 years, several recent papers have argued that economic growth and poverty reduction in Africa was substantially better than suggested by national income data and income poverty statistics, which suffer from well-known weaknesses. We scrutinize these claims and first argue that trends in assets provide biased proxies for trends in incomes or consumption. In particular we show that the relationship between growth in assets and growth in incomes or consumption is extremely weak; instead, we find evidence of asset drift using macro and micro data, which is consistent with the claims we make about possible biases in the use of asset indices. As a result, we find no evidence supporting the claim of an African growth miracle that extends beyond what has been reported in official GDP/capita and consumption figures.