The study examined the linkages between inequality in household expenditure components and
total inequality and poverty in Ghana. Using micro data from the sixth round of the Ghana
Living Standards Survey conducted in 2012/2013, marginal effects and elasticities were
computed for both within-and between-component analysis. The results suggest that, in general,
reducing within-component inequality significantly reduces overall poverty and inequality in
Ghana, compared to between-component inequality. Specifically, inequality in education and
health expenditure components were the largest contributors to overall poverty and inequality.
The findings imply that policies directed towards reducing within-component inequality will be
more effective than those directed towards between-component inequality. Specifically, the
findings of the study corroborates with tax policies (such as Value Added Tax and National
Health Insurance Levy in the case of Ghana) that provide exemptions for educational, health and
agricultural inputs. This will lead to reduction in overall poverty and inequality by reducing
inequality within these expenditure components. The results were robust to the choice of poverty
line and consistent for both rural and urban locations.