Do rural households smooth their consumption? Applying an asset-based approach to the case of Malawi
AbstractSmallholder farming households in most of the developing countries, live in environments that are characterized by substantial risk. They consequently develop a range of risk management strategies. However, analyzing household consumption smoothing behaviour requires the availability of both income and consumption data. Since household income data are usually unavailable in many developing countries, including Malawi, this paper develops an asset-based framework to analyze consumption smoothing behaviour at household and community levels using a two-period panel dataset on 259 rural households in Malawi. The results show that while consumption smoothing takes place at the household level, it is not perfect. Food consumption is protected more than non-food consumption. Risk sharing also takes place at the community level. The major policy implication is that social protection programmes should promote household asset accumulation to enable rural households manage livelihood risks better.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 15398.
Date of creation: 05 Jan 2009
Date of revision:
Consumption smoothing; risk; rural Malawi;
Find related papers by JEL classification:
- B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
This paper has been announced in the following NEP Reports:
- NEP-AFR-2009-05-30 (Africa)
- NEP-AGR-2009-05-30 (Agricultural Economics)
- NEP-ALL-2009-05-30 (All new papers)
- NEP-DEV-2009-05-30 (Development)
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