Price policy,poverty, and power within rural West African households

This paper explores the impact of agricultural price policy on poverty in West Africa, a region in which prices are an important tool for raising rural household incomes. A game-theoretic, collective model of household income generation and resource allocation is developed that incorporates three features typical of West African rural households: preference heterogeneity among women and men, individual resource control, and power-mediated bargaining over resource control in the face of changes in households' economic environments. To explore price effects, the model is used to simulate the income impacts of large increases in cotton prices accompanying fast-paced agricultural liberalisation in Burkina Faso in the 1980s. The paper shows that where resources are controlled individually by household members, rather than pooled, Pareto efficiency in income generation does not hold. The impact of agricultural price policy on poverty is mediated by bargaining over resource control within households. Both the relative bargaining power of women and men and the degree of preference heterogeneity between them play fundamental roles in the outcome of such bargaining. The results point to a lower ability of households to take advantage of price incentives and thereby raise their incomes than a unitary household model, in which preferences do not differ and resources are pooled, predicts. They suggest that the effectiveness of price policy in reducing poverty in the region would be enhanced by taking into account the incentive structure within households as well as individual household members' ability to bargain over the benefit and cost streams flowing from price changes.     

The Impact of Household Structure on Female Autonomy in Developing Countries

Abstract

Joint household structures in which several generations co-reside in a single house are common across developing countries. Such households may confer benefits on all the family members through household public goods with the patriarch exercising greater control over resources. Therefore, the household structure may affect the bargaining power of its members. This paper estimates the effect of joint versus nuclear household structure in India on the autonomy of women and their labour force participation and the heterogeneity in the effects by income, caste, and region. I use an instrumental variable approach and find that women living in nuclear households have greater decision-making power.     

Transforming Gender Relations through the Market: Smallholder Milk Market Participation and Women`s Intra-household Bargaining Power in Ethiopia

We study the relationship between smallholder milk market participation and women`s intra-household bargaining position in Ethiopia, using a quasi-experiment and propensity score matching. In market participant households, milk income is higher and its control has shifted from women to men. Our data also indicate that men transfer this income partly to their wives. Qualitative findings indicate that men see this as recognition for their wife’s household maintenance responsibility. Women argue however that transferring income is also men`s tactic for reducing intra-household conflict. Overall, dependency between husbands and wives seems higher and a woman’s bargaining position stronger in participant households.     

Determinants and effects of income diversification amongst farm households in Burkina Faso

Using four years of household data from three agroecological zones in Burkina Faso ‐ Sahelian, Sudanian, and Guinean ‐ the article examines the determinants and effects of household income diversification. Harvest shortfalls and terms of trade are found to drive diversification, but land constraints do not. Income diversification is associated with higher incomes and food consumption, and more stable income and consumption over years.     

Cows,Missing Milk Markets,and Nutrition in Rural Ethiopia

Abstract

In rural economies encumbered by significant market imperfections, farming decisions may partly be motivated by nutritional considerations, in addition to income and risk factors. These imperfections create the potential for farm assets to have direct dietary impacts on nutrition in addition to any indirect effects via income. We test this hypothesis for the dairy sector in rural Ethiopia, finding that cow ownership raises children’s milk consumption, increases linear growth, and reduces stunting. We also find that household cow ownership is less important where there is good access to local markets, suggesting that market development can substitute for household cow ownership.     

Local Financial Development and Household Welfare in Vietnam: Evidence from a Panel Survey

We examine the impact of local financial development on household welfare in Vietnam. We employ household-level panel data for the periods 2007, 2008, 2010 and 2013 covering three provinces and measure local financial development at the district, sub-district and village levels. To account for potential endogeneity that could emanate from the fact that local economic development could spur local financial development, we employ a recently suggested method of identification through heteroscedasticity. Our results show that local financial development has a significantly positive effect on household annual income, consumption and consumption smoothing.     

Spousal Bargaining Over Care for Elderly Parents in China: Imbalances in Sex Ratios Influence the Allocation of Support

Using a unique Chinese survey of parents and adult children, this paper examines how married children negotiate with their spouses for time devoted to caring for their own parents. Applying a collective bargaining framework, I show that the sex ratio at marriage shifts household bargaining in favour of the husband’s parents when women are less scarce, or against his parents when women are scarcer. Such changing dynamics in the family may potentially reverse the current preference for sons in China, implying that those with sons, rather than daughters, may be increasingly in need of state support.     

Sustainability Standards,Gender, and Nutrition among Smallholder Farmers in Uganda

Sustainability standards are gaining in importance in global markets for high-value foods. While previous research has shown that participating farmers in developing countries may benefit through income gains, nutrition impacts have hardly been analysed. We use survey data from smallholder coffee farmers in Uganda – certified under Fairtrade, Organic, and UTZ – to analyse impacts on food security and dietary quality. Estimates of instrumental variable models and simultaneous equation systems show that certification increases calorie and micronutrient consumption, mainly through higher incomes and improved gender equity. In certified households, women have greater control of coffee production and monetary revenues from sales.     

Identifying a Sustained Pathway to Multidimensional Poverty Reduction: Evidence from Two Chinese Provinces

Poor rural households in developing countries often endure many-faceted burdens including monetary poverty, nutrition deficiency and energy shortage due to reliance on limited local natural resources with low utilisation efficiency. We investigate a sustained pathway in rural China to escape the vicious circle between three important dimensions of poverty – deficiency of income, malnutrition and a low energy consumption profile in terms of reliance on firewood. By exploiting household panel data and a dynamic and recursive multi-equation mixed mode, we identify inter-locking deprivations in income, nutrition and energy consumption. Firewood plantations only offer short-term solutions to break them through income effects, while the sustained pathways in the long-term are increasing agricultural labour productivity and provision of agricultural loans.     

Microfinance and Poverty in Bolivia

Both in its institutional range and in its penetration of financial markets, the microfinance sector in Bolivia rivals any in the world, and has played a major part in extracting the macro-economy from meltdown since the mid-1980s. We seek specifically to assess its impact on poverty, and do this through small-sample surveys on four microfinance institutions, two urban and two rural, using a range of poverty concepts: income (generated both through the borrower's enterprise and through the labour market), asset holdings and diversity, and various measures of vulnerability. All the institutions studied had, on balance, positive impacts on income and asset levels, with income impacts correlating negatively with income on account of poor households choosing to invest in low-risk, low-return assets. Microfinance may, however, augment vulnerability: average debt-service ratios of microfinance clients are disturbingly high, and if the coping mechanisms used by borrowers fail, borrowers may be forced out of the microfinance system, possibly resulting in decapitalisation and impoverishment. Poorer households are more restricted in their choice of coping strategy, and many as a consequence 'choose' coping strategies more likely to jeopardise their long-term income prospects, in particular asset sales and cuts in children's schooling. The more successful low-income borrowers are those who have voluntary savings deposits and do not rush into fixed capital purchases too early: collapse back into poverty is associated with multiple crises and the failure of one or more 'safety nets', in particular of one or more 'safety nets', in particular support from a member's solidarity group. The following actions appear to be promising for the further reduction of poverty in Bolivia: stronger efforts to mobilise rural savings, removal of lower limits on loan size, and the introduction of appropriate insurance mechanisms. In comparison with other anti-poverty measures, microfinance appears to be successful and relative cheap at reducing the poverty of those close to the poverty line, but ineffective, by comparison with labour-market and infrastructural measures, in reducing extreme poverty.     

The Cost of Empowerment: Multiple Sources of Women’s Debt in Rural India

Abstract

Poor women borrow from multiple sources. This study examines whether the source of debt matters for women’s role in household financial decisions. Drawing on a household survey from rural Tamil Nadu, we categorise women’s loans along the lines of accessibility and formality into ‘planned loans’ and ‘instant loans’. We find that ‘instant loans’ support women’s bargaining power in various types of household financial decisions, whereas ‘planned loans’ have no impact. This surprising result is better understood when the nature of ‘instant loans’ is examined – these are frequently usurious, involve coercive enforcement methods and are considered socially debasing. Hence women who use them perform a convenient role for their households and in return gain some negotiating power.     

Off the Hook: Measuring the Impact of Mobile Telephone Use on Economic Development of Households in Uganda using Copulas

It is now widely understood that mobile phone use has beneficial effects on development in developing countries, but little is known about the effects at the household level. We examine the impact of mobile telephone use on household income using a unique cross-sectional data set from Uganda. We use a novel econometric technique to handle endogeneity, which models the correlation between the endogenous regressor and the error term with copulas. To the best of our knowledge, this is the first time that the copula method has been applied in the economic development literature. We find a positive impact of mobile phone use on income.     

Do Participatory Learning and Action Women’s Groups Alone or Combined with Cash or Food Transfers Expand Women’s Agency in Rural Nepal?

Participatory learning and action women’s groups (PLA) have proven effective in reducing neonatal mortality in rural, high-mortality settings, but their impacts on women’s agency in the household remain unknown. Cash transfer programmes have also long targeted female beneficiaries in the belief that this empowers women. Drawing on data from 1309 pregnant women in a four-arm cluster-randomised controlled trial in Nepal, we found little evidence for an impact of PLA alone or combined with unconditional food or cash transfers on women’s agency in the household. Caution is advised before assuming PLA women’s groups alone or with resource transfers necessarily empower women.     

Have a Son,Gain a Voice: Son Preference and Female Participation in Household Decision Making

This study analyses the effects of observed preference for boys on Pakistani women’s participation in household decision-making. We find a significant association between female participation in various household decisions and their preference for boys. Bearing at least one son is associated with 5 per cent, 7 per cent, and 5 per cent higher say in decisions involving healthcare, social, and consumption matters, respectively. Women’s role in financial affairs, however, does not change significantly. Female participation in decision-making grows with the number of sons but only up to third parity. The improvement in female participation remains limited and decision- or context-specific.     

Why Micro-Credit May Leave Women Worse Off: Non-Cooperative Bargaining and the Marriage Game in South Asia

Micro-credit programmes targeting women continue to grow in South Asia, although research suggests that wives frequently hand over loans to their husbands. Women may also be unable to control the income generated by micro-enterprises. This article presents an intra-household bargaining model explaining these findings and showing how credit may leave women worse off, while benefiting men. This game-theoretic model also shows why a woman might rationally choose to give her loan to her husband even though she does not expect to benefit and knows he may not repay. Finally, the article identifies the conditions necessary for micro-credit to benefit women.     

Women’s Empowerment and Wellbeing: Evidence from Africa

We use household survey data from Senegal to model the effects of empowerment within the home on married women’s wellbeing. The estimated effects of empowerment are at least as large as more conventional development indicators, such as household income. The size of the empowerment effect is robust to alternative estimation techniques, including an Instrumental Variables estimator.     

Distributional Effects of Maize Price Increases in Malawi

Abstract

In the wake of highly volatile world prices of staple commodities, we examine the impacts of increases in maize prices on various categories of households in Malawi. Using household-level data, changes in household income are calculated taking into account the net maize production status of the household and food price elasticities estimated from a censored demand system. While maize price increases have unequivocal deleterious effects on the incomes of urban households, rural households experience differential impacts. Net producing households in rural areas benefit from price increases with households above the poverty line obtaining proportionally higher incomes.     

Agricultural Workers,Credit Rationing and Family Networks in Rural Mexico

Abstract

We use mixed methods and first-hand household data in Mexico to investigate credit practices by households engaged in agricultural wage employment. Quantitative analysis shows evidence of rationing in the formal sector but also suggests the existence of mitigating mechanisms. Qualitative analysis provides additional insights. First, income patterns associated with agricultural wage generate income smoothing needs that are sometimes better met by the informal sector. Second, family networks can perform key functions as gateways to the formal sector, through specific informal arrangements that inject flexibility into formal rules and procedures.     

Institutions and Poverty

This study utilises eight alternative measures of institutions and the instrumental variable method to examine the impacts of institutions on poverty. The estimates show that an economy with a robust system to control corruption, an effective government, and a stable political system will create the conditions to promote economic growth, minimise income distribution conflicts, and reduce poverty. Corruption, ineffective governments, and political instability will not only hurt income levels through market inefficiencies, but also escalate poverty incidence via increased income inequality. The results also imply that the quality of the regulatory system, rule of law, voice and accountability, and expropriation risk are inversely related to poverty but their effect on poverty is via average income rather than income distribution.     

Thinking Inside the Box: A Closer Look at Financial Inclusion and Household Income

Using national representative household finance survey data covering more than 6200 Chinese households, we first construct a new multidimensional indicator for financial inclusion. Then we examine the effect of financial inclusion on household income. Our results elicit several findings. First, financial inclusion has a strong positive effect on household income. This effect can be found across all households with different levels of income. Second, low-income households are found to benefit more from financial inclusion than high and mid-level income ones. We argue that, in this sense, financial inclusion helps reduce income inequality.