Is the Informal Sector Constrained from the Demand Side? Evidence for Six West African Capitals
Employing 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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lourdes Diaz Olvera & Didier Plat & Pascal Pochet, 2008. "Household transport expenditure in Sub-Saharan African cities: measurement and analysis," Post-Print halshs-00264231, HAL.
- Fortin, Bernard & Lacroix, Guy & Montmarquette, Claude, 1997.
"Are Underground Workers More Likely to be Underground Consumers?,"
Cahiers de recherche
9710, Université Laval - Département d'économique.
- Fortin, Bernard & Lacroix, Guy & Montmarquette, Claude, 2000. "Are Underground Workers More Likely to be Underground Consumers?," Economic Journal, Royal Economic Society, vol. 110(466), pages 838-60, October.
- Bernard Fortin & Guy Lacroix & Claude Montmarquette, 1997. "Are Underground Workers More Likely To Be Underground Consumers?," CIRANO Working Papers 97s-28, CIRANO.
- Chern, Wen S. & Wang, Guijing, 1994. "The Engel function and complete food demand system for Chinese urban households," China Economic Review, Elsevier, vol. 5(1), pages 35-57.
- Barry Reilly & Gorana Krstic & Matteo Cominetta, 2006. "Purchasing from Informal Markets: Evidence from Serbia," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 52(3), pages 30-50.
- Rafael La Porta & Andrei Shleifer, 2011.
"The Unofficial Economy in Africa,"
NBER Working Papers
16821, National Bureau of Economic Research, Inc.
- Massell, Benton F & Heyer, Judith, 1969. "Household Expenditure in Nairobi: A Statistical Analysis in Consumer Behavior," Economic Development and Cultural Change, University of Chicago Press, vol. 17(2), pages 212-34, January.
- Grimm, Michael & Gunther, Isabel, 2005. "Inter- and Intra-household Linkages Between the Informal and Formal Sector: A Case Study for Urban Burkina Faso," Working Paper Series RP2005/14, World Institute for Development Economic Research (UNU-WIDER).
- Griliches, Zvi, 1974. "Errors in Variables and Other Unobservables," Econometrica, Econometric Society, vol. 42(6), pages 971-98, November.
- Cervero, Robert & Golub, Aaron, 2007. "Informal transport: A global perspective," Transport Policy, Elsevier, vol. 14(6), pages 445-457, November.
- Michael Grimm & Jens Krüger & Jann Lay, 2011.
"Barriers To Entry And Returns To Capital In Informal Activities: Evidence From Sub‐Saharan Africa,"
Review of Income and Wealth,
International Association for Research in Income and Wealth, vol. 57, pages S27-S53, 05.
- Grimm, Michael & Kruger, Jens & Lay, Jann, 2011. "Barriers to entry and returns to capital in informal activities : evidence from Sub-Saharan Africa," Social Protection Discussion Papers 77927, The World Bank.
- Richard Blundell & Alan Duncan, 1998. "Kernel Regression in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 62-87.
- Abbi Kedir & Sourafel Girma, 2007. "Quadratic Engel Curves with Measurement Error: Evidence from a Budget Survey," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(1), pages 123-138, 02.
- Xaba, Jantjie & Horn, Pat & Motala, Shirin & Singh, Andrea, 2002. "Informal sector in Sub-Saharan Africa," ILO Working Papers 355190, International Labour Organization.
- Keen, Michael, 1986. "Zero Expenditures and the Estimation of Engel Curves," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(3), pages 277-86, July.
- Teklu, T., 1996. "Food demand studies in Sub-Saharan Africa: a survey of empirical evidence," Food Policy, Elsevier, vol. 21(6), pages 479-496, December.
- Lewbel, Arthur, 1996. "Demand Estimation with Expenditure Measurement Errors on the Left and Right Hand Side," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 718-25, November.
- John Gibson & Bonggeun Kim, 2007. "Measurement Error in Recall Surveys and the Relationship between Household Size and Food Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 473-489.
- Theil, Henri, 1979. "The effect of measurement errors on the estimation of demand systems," Economics Letters, Elsevier, vol. 3(4), pages 373-376.
- Lionel Fontagné & Michael Freudenberg & Guillaume Gaulier, 2006.
"A Systematic Decomposition of World Trade into Horizontal and Vertical IIT,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer, vol. 142(3), pages 459-475, October.
- Lionel Fontagné & Michael Freudenberg & Guillaume Gaulier, 2006. "A Systematic Decomposition of World Trade into Horizontal and Vertical IIT," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00270504, HAL.
- Gibson, John, 2002.
" Why Does the Engel Method Work? Food Demand, Economies of Size and Household Survey Methods,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 64(4), pages 341-59, September.
- John Gibson, 2002. "Why Does the Engel Method Work? Food Demand, Economies of Size and Household Survey Methods," Working Papers in Economics 02/02, University of Waikato, Department of Economics.
- D'Haese, Marijke & Van Huylenbroeck, Guido, 2005. "The rise of supermarkets and changing expenditure patterns of poor rural households case study in the Transkei area, South Africa," Food Policy, Elsevier, vol. 30(1), pages 97-113, February.
- Livingstone, Ian, 1991. "A reassessment of Kenya's rural and urban informal sector," World Development, Elsevier, vol. 19(6), pages 651-670, June.
- David McKenzie, 2005. "Measuring inequality with asset indicators," Journal of Population Economics, Springer, vol. 18(2), pages 229-260, 06.
- de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2007.
"Returns to capital in microenterprises : evidence from a field experiment,"
Policy Research Working Paper Series
4230, The World Bank.
- Suresh de Mel & David McKenzie & Christopher Woodruff, 2008. "Returns to Capital in Microenterprises: Evidence from a Field Experiment," The Quarterly Journal of Economics, MIT Press, vol. 123(4), pages 1329-1372, November.
- de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2007. "Returns to Capital in Microenterprises: Evidence from a Field Experiment," IZA Discussion Papers 2934, Institute for the Study of Labor (IZA).
- Deaton, A., 1988.
"Quality, Quantity, And Spatial Variation Of Price,"
30, World Bank - Living Standards Measurement.
- Jerry Hausman, 2001. "Mismeasured Variables in Econometric Analysis: Problems from the Right and Problems from the Left," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 57-67, Fall.
- James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
- L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
- Deon Filmer & Lant Pritchett, 2001. "Estimating Wealth Effects Without Expenditure Data—Or Tears: An Application To Educational Enrollments In States Of India," Demography, Springer, vol. 38(1), pages 115-132, February.
- Klarita G�rxhani, 2004. "The Informal Sector in Developed and Less Developed Countries: A Literature Survey," Public Choice, Springer, vol. 120(3_4), pages 267-300, 09.
- Banerji, Arup & Jain, Sanjay, 2007. "Quality dualism," Journal of Development Economics, Elsevier, vol. 84(1), pages 234-250, September.
- Vincenzo Merella, 2006. "Engel’s curve and product differentiation: A dynamic analysis of the effects of quality on consumer’s choice," International Review of Economics, Springer, vol. 53(2), pages 157-182, June.
- Douglas Staiger & James H. Stock, 1997.
"Instrumental Variables Regression with Weak Instruments,"
Econometric Society, vol. 65(3), pages 557-586, May.
- Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
- Filmer, Deon & Pritchett, Lant, 1998. "Estimating wealth effects without expenditure data - or tears : with an application to educational enrollments in states of India," Policy Research Working Paper Series 1994, The World Bank.
- Guang H. Wan, 1996. "Income elasticities of household demand in rural China: Estimates from cross-sectional survey data," Journal of Economic Studies, Emerald Group Publishing, vol. 23(3), pages 18-33, September.
When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:40:y:2012:i:7:p:1369-1381. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.