ABSTRACT
In order to study income distribution, its causes and consequences, and to evaluate whether the stylized facts on income distribution that are used to construct models of development are relevant ones, reader's need to construct an overall description of income distribution in Kenya. Estimating urban income is a comparatively straight forward process compared to estimating rural income. There are two sources of income that are reported. The first is income from wage employment, and the second is net income from self-employment. Most households in the country, namely 69.4 per cent, receive some income from non-wage activity. In the rural areas not only do a large number of households receive non-wage income, the per capita non-wage income is higher than the per capita wage income. In the urban areas, as one would expect, wage income is earned by an overwhelming proportion of the population and the per capita wage income is higher than its non-wage counterpart.
