Assessment of Income Inequality, Structure and Conduct of Cocoa Marketers in Osun State, Nigeria

Abstract

The level of income inequality and structure-conduct of cocoa marketers were evaluated in Osun State, Nigeria. Primary data were collected with the aid of a well-structured questionnaire, while a multistage sampling procedure was used to select 120 respondents for the study. Descriptive statistics, concentration ratio, Gini coefficient, index of dissimilarity, Herfindahl index; Ordinary Least Square (OLS) as well as Quantile Regression (QR) were used as analytical tools. The result showed the value of Gini coefficient as 0.76, which established a relatively high level of income inequality among cocoa marketers in the study area. The concentration ratio of one, two and four largest marketers in the cocoa marketing business also accounted for 19.2%, 31.9% and 45.8% respectively, of the total volume of cocoa beans sold in the study area, while the value (0.069) of the Herfindahl index further confirmed the presence of low concentration in the market share of cocoa marketers in the study area. The OLS result revealed that household size, education, access to credit, depreciation cost on fixed inputs and labour cost constituted the main factors affecting the income of the marketers, while depreciation cost on fixed inputs and labour cost were consistently significant in OLS and across the conditional quantiles (q25, q50 and q75). Therefore, it is expected that appropriate practical approach in addressing high level of income inequality as identified by the study should be taken by all stakeholders in the industry, with a view to making low-interest credit facilities and incentives available to the marketers in order to increase their scale of operations, and consequently bridge the inequality gap.