IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Livestock, Activity Choices and Conflict: Evidence from Burundi

  • Tom Bundervoet

    ()

    (Free University of Brussels)

Standard economic risk theory postulates that in the absence of credit markets, wealthier households will engage in higher-risk, higher profit activities to generate income while poor households will specialize in low-risk activities with low returns. The rationale is that wealthier households can deplete savings when things go wrong whereas poor household cannot. This theoretical argument has been tested for several countries and is generally validated by the data. However, existing studies on the relation between savings and activity choices implicitly assume that savings are certain or risk-free. This study suggests that explicitly allowing household savings or assets to be risky can yield results that differ considerably from the pattern predicted by the standard theoretical model. Using data from the 1998 household priority survey in Burundi, we estimate the relationship between household savings (livestock) and choices of incomegenerating activities (risky vs. less-risky activities). We exploit the fact that surveyed households in certain regions in Burundi were exposed to a relative higher level of risk and uncertainty due to the civil war preceding and during the time of the survey. We find that in general household savings exercise their usual risk-taking effect, though that this effect disappears and even reverses for households in the conflict affected regions. In those regions, wealthier households do not reduce allocation to low-risk low-return activities. We argue that this finding can probably (in part) explain the massive increase in poverty in the provinces exposed to the war during the 1990-1998 period. In this fashion, we argue that a type of ’productive social safety net’, as recently discussed in the development literature, could possibly be an effective policy measure to lower the increased asset risk induced by conflict.

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.

File URL: http://www.hicn.org/wordpress/wp-content/uploads/2012/06/wp24.pdf
Download Restriction: no

Paper provided by Households in Conflict Network in its series HiCN Working Papers with number 24.

as
in new window

Length: 34 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:hic:wpaper:24
Contact details of provider: Web page: http://www.hicn.org

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.:

as in new window
  1. Pak Hung Mo, 2003. "Land Distribution Inequality And Economic Growth: Transmission Channels And Effects," Pacific Economic Review, Wiley Blackwell, vol. 8(2), pages 171-181, 06.
  2. Tilman Brück, 2004. "The Welfare Effects of Farm Household Activity Choices in Post-War Mozambique," HiCN Working Papers 04, Households in Conflict Network.
  3. Tschirley, David L. & Weber, Michael T., 1994. "Food security strategies under extremely adverse conditions: The determinants of household income and consumption in rural Mozambique," World Development, Elsevier, vol. 22(2), pages 159-173, February.
  4. Deininger, Klaus & Castagnini, Raffaella, 2004. "Incidence and impact of land conflict in Uganda," Policy Research Working Paper Series 3248, The World Bank.
  5. Jayne, T. S. & Yamano, Takashi & Weber, Michael T. & Tschirley, David & Benfica, Rui & Chapoto, Antony & Zulu, Ballard, 2003. "Smallholder income and land distribution in Africa: implications for poverty reduction strategies," Food Policy, Elsevier, vol. 28(3), pages 253-275, June.
  6. Newell, Andrew & Pandya, Kiran & Symons, James, 1997. "Farm Size and the Intensity of Land Use in Gujarat," Oxford Economic Papers, Oxford University Press, vol. 49(2), pages 307-15, April.
  7. Binswanger, Hans P & McIntire, John, 1987. "Behavioral and Material Determinants of Production Relations in Land-Abundant Tropical Agriculture," Economic Development and Cultural Change, University of Chicago Press, vol. 36(1), pages 73-99, October.
  8. Bruce, John W., 1998. "Review Of Tenure Terminology," Tenure Briefs 12814, University of Wisconsin-Madison, Land Tenure Center.
  9. Feder, Gershon & Noronha, Raymond, 1987. "Land Rights Systems and Agricultural Development in Sub-Saharan Afric a," World Bank Research Observer, World Bank Group, vol. 2(2), pages 143-69, July.
  10. Singh, Inderjit & Squire, Lyn & Strauss, John, 1986. "A Survey of Agricultural Household Models: Recent Findings and Policy Implications," World Bank Economic Review, World Bank Group, vol. 1(1), pages 149-79, September.
  11. Migot-Adholla, Shem, et al, 1991. "Indigenous Land Rights Systems in Sub-Saharan Africa: A Constraint on Productivity?," World Bank Economic Review, World Bank Group, vol. 5(1), pages 155-75, January.
  12. Lastarria-Cornhiel, Susana, 1997. "Impact of privatization on gender and property rights in Africa," World Development, Elsevier, vol. 25(8), pages 1317-1333, August.
  13. Strasberg, Paul J. & Kloeck-Jenson, Scott, 2002. "Challenging Conventional Wisdom: Smallholder Perceptions And Experience Of Land Access And Tenure Security In The Cotton Belt Of Northern Mozambique," Working Papers 12794, University of Wisconsin-Madison, Land Tenure Center.
  14. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  15. Andre, Catherine & Platteau, Jean-Philippe, 1998. "Land relations under unbearable stress: Rwanda caught in the Malthusian trap," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 1-47, January.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hic:wpaper:24. 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: (Alia Aghajanian)

or ()

The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address or ()

or ()

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.