Regional Income Differences in Ghana: The Importance of Socio-Demographic and Ethnicity

Abstract

Income differences have gained increased attention among policy makers and economists in Ghana and around the world. Several factors affect income differences in and across different geographical levels in the Country. The Paper therefore presents a comparative analysis of regional income differences in Ghana with regional panel data for 1960, 1970, 1984 and 2000. The results show a relationship between socio-demographic factors and regional income differences. It was identified that ethnicity and religion have different impacts on regional income; Christians have positive effect on regional income but not Muslims and Akans. Again, high population density in a region reduces the mean regional income; similarly, high concentration of population over 60years reduces the average regional income. Evidence from the results empirically emphasize that, regions with high share of aged population, Akans, Muslims and high population density have low regional income compared with regions with high share of Christians and low share of Akans.

Keywords: ethnicity, Ghana, income differences, religion, socio-demographic,