The Sources of Welfare Disparities Across and Within Regions of Brazil: Evidence from the 2002-03 POF

Brazil’s inequalities in welfare and poverty between and within regions can be accounted by differences in household attributes and returns to those attributes. Using Blinder-Oaxaca decompositions at the mean as well as at different quantiles of welfare distributions on regionally representative household survey data (2002-03 POF), this paper finds that household attributes account for most of the welfare differences between urban and rural areas within regions. However, comparing the lagging Northeast region with the leading Southeast region, differences in returns to attributes account for a large part of the welfare disparities, in particular in metropolitan areas, supporting the presence of agglomeration effects in booming areas. JEL classification: