The Rich Are Just Like Us, Only Richer': Poverty Functions or Consumption Functions?

The reduced form determinants of economic welfare, proxied by consumption, are modelled using the first nationally representative household survey of Uganda. It is investigated whether anything is gained by modelling poverty rather than welfare, when poverty is measured by the poverty gap. Parameters from the tobit poverty function are found to be generally similar to those from consumption functions, indicating that the poor receive comparable rates of return on their assets to the non?poor. The main exception is that the return to labour is significantly lower for the poor, even with many controls.