Sources of welfare disparities between and within regions of Brazil: evidence from the 2002-2003 household budget survey (POF)

Brazil's inequalities in welfare and poverty between and within regions can be accounted for by differences in household attributes and returns to those attributes. Using Oaxaca-Blinder decompositions at the mean as well as at different quantiles of welfare distributions on regionally representative household survey data [2002-2003 Pequisa de Orcamentos Familiares (POF)], this article 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 the welfare gains of attributes are associated with a large part of the welfare disparities, in particular in metropolitan areas, supporting the presence of agglomeration effects in booming areas.