Although some studies have attempted to assess the rural–urban income gap in the 1960s and 1970s, no study has focused on the evolution of the gap over the past 25 years, let alone the evolution in the real differences in per capita income between the rural sector and the urban one. The objective of this study is to fill the gap in the literature on this topic and to appraise the development in the gap – in nominal and real terms – both on the aggregate per capita rural and urban income levels and in different expenditure size classes from 1981 till 2005, a period which witnessed a revolution in the agricultural policies from intensive government intervention to complete liberalization. The results of the study prove that the gap diverged again from 1994 to 2005 after converging from 1981 to 1994. The study also proves that the gap is more apparent in the middle classes rather than the lower ones. Finally, with respect to food consumption the study concluded that a slight gap may exist in favour of rural – and not urban – Egypt.

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