Is the Informal Sector Constrained from the Demand Side? Evidence for Six West African Capitals
AbstractEmploying a unique dataset that covers households from six West African capitals, this paper provides new evidence on the demand for informal sector products and services. We first investigate whether demand linkages exist between formal and informal products and distribution channels. In a second step, we estimate demand elasticities based on Engel curves. We find strong demand-side linkages between the formal and informal sector, with the exception that informal goods are hardly bought through formal distribution channels. The estimated demand elasticities tend to show that rising incomes are associated with a lower propensity to consume informal sector goods and to use informal distribution channels.
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Bibliographic InfoArticle provided by Elsevier in its journal World Development.
Volume (Year): 40 (2012)
Issue (Month): 7 ()
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Web page: http://www.elsevier.com/locate/worlddev
informal sector; formal–informal linkages; Engel curve estimates; Africa; West African capitals;
Other versions of this item:
- Marcus Böhme & Rainer Thiele, 2011. "Is the Informal Sector Constrained from the Demand Side? Evidence for Six West African Capitals," Kiel Working Papers 1683, Kiel Institute for the World Economy.
- Thiele, Rainer & Böhme, Marcus, 2011. "Is the Informal Sector Constrained from the Demand Side? Evidence for Six West African Capitals," Open Access Publications from Kiel Institute for the World Economy 48307, Kiel Institute for the World Economy (IfW).
- Thiele, Rainer & Böhme, Marcus, 2011. "Is the Informal Sector Constrained from the Demand Side? Evidence for Six West African Capitals," Proceedings of the German Development Economics Conference, Berlin 2011 76, Verein für Socialpolitik, Research Committee Development Economics.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
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