Gold exploitation and income disparities: the Case of Burkina Faso

In the past decade, Burkina Faso experienced a dramatic gold mining boom. In 2009, the gold sector represented 5% of GDP, whereas it was around 0.3% in the early 2000s. This rapidly expanding gold sector has brought the country to the rank of the fourth largest gold producer among African nations. The main objective in this paper is to examine how the development occurred in the gold sector has affected income disparities across departments. Specifically, we use household surveys data from 2003 and 200 9 and administrative data to estimate the effect of gold exploitation on living standa rd outcomes. Preliminary results suggest that areas hosting a gold extraction have better average living standards in terms of headcount ratios, poverty gaps and household expenditures than their counterparts without gold. We also assess theoretically the effect of gold exploi tation on some outcome variables. Results are generally consistent with the empirical finding s.