IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/rp2006-145.html
   My bibliography  Save this paper

Asset Portfolios in Africa: Evidence from Rural Ethiopia

Author

Listed:
  • Christian Rogg

Abstract

This paper considers asset holdings in rural Ethiopia. It shows that households own mostly non-financial assets and that the composition of asset portfolios varies significantly with the household's overall wealth and its exposure to uncertainty. As regards the distribution of assets, inequality is lowest for land holdings and much higher for all other assets. More generally, asset inequality is higher than consumption inequality but, somewhat surprisingly, lower than income inequality.

Suggested Citation

  • Christian Rogg, 2006. "Asset Portfolios in Africa: Evidence from Rural Ethiopia," WIDER Working Paper Series RP2006-145, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:rp2006-145
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/rp2006-145.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fafchamps, Marcel & Quisumbing, Agnes, 2005. "Assets at marriage in rural Ethiopia," Journal of Development Economics, Elsevier, vol. 77(1), pages 1-25, June.
    2. Stefan Dercon & Pramila Krishnan, 1996. "Income portfolios in rural Ethiopia and Tanzania: Choices and constraints," Journal of Development Studies, Taylor & Francis Journals, vol. 32(6), pages 850-875.
    3. Jalan, Jyotsna & Ravallion, Martin, 2001. "Behavioral responses to risk in rural China," Journal of Development Economics, Elsevier, vol. 66(1), pages 23-49, October.
    4. Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, vol. 55(2), pages 273-305, April.
    5. Gersovitz, Mark, 1988. "Saving and development," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 10, pages 381-424, Elsevier.
    6. Dercon, Stefan, 2004. "Growth and shocks: evidence from rural Ethiopia," Journal of Development Economics, Elsevier, vol. 74(2), pages 309-329, August.
    7. Bereket Kebede, 2006. "Land reform distribution of land & institutions in rural Ethiopia: analysis of inequality with dirty data," CSAE Working Paper Series 2006-05, Centre for the Study of African Economies, University of Oxford.
    8. Stefan Dercon & Krishnan Pramila, 1998. "Changes in Poverty in Rural Ethiopia 1989-1995: Measurement, Robustness Tests and Decomposition," Working Papers of Department of Economics, Leuven 501299, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    9. Dercon, Stefan, 1998. "Wealth, risk and activity choice: cattle in Western Tanzania," Journal of Development Economics, Elsevier, vol. 55(1), pages 1-42, February.
    10. Kotlikoff, Laurence J & Spivak, Avia, 1981. "The Family as an Incomplete Annuities Market," Journal of Political Economy, University of Chicago Press, vol. 89(2), pages 372-391, April.
    11. Pratt, John W & Zeckhauser, Richard J, 1987. "Proper Risk Aversion," Econometrica, Econometric Society, vol. 55(1), pages 143-154, January.
    12. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
    13. Marcel Fafchamps, 2002. "Inequality and Risk," WIDER Working Paper Series DP2002-07, World Institute for Development Economic Research (UNU-WIDER).
    14. Carmen Diana Deere & Cheryl R. Doss, 2006. "Gender and the Distribution of Wealth in Developing Countries," WIDER Working Paper Series RP2006-115, World Institute for Development Economic Research (UNU-WIDER).
    15. Kimball, Miles S, 1993. "Standard Risk Aversion," Econometrica, Econometric Society, vol. 61(3), pages 589-611, May.
    16. OR Attanasio & J Banks, 2001. "The assessment: household saving - issues in theory and policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 17(1), pages 1-19, Spring.
    17. Bigsten, Arne & Kebede, Bereket & Shimeles, Abebe & Taddesse, Mekonnen, 2003. "Growth and Poverty Reduction in Ethiopia: Evidence from Household Panel Surveys," World Development, Elsevier, vol. 31(1), pages 87-106, January.
    18. Burger, Ronelle & Booysen, Frikkie & Berg, Servaas van der & Maltitz, Michael von, 2006. "Marketable Wealth in a Poor African Country," MPRA Paper 9063, University Library of Munich, Germany.
    19. repec:wbk:wbpubs:12425 is not listed on IDEAS
    20. Bereket Kebede, 2006. "Land Reform, Distribution of Land and Institutions in Rural Ethiopia: Analysis of Inequality with Dirty Data," Economics Series Working Papers WPS/2006-05, University of Oxford, Department of Economics.
    21. Rosenzweig, Mark R & Binswanger, Hans P, 1993. "Wealth, Weather Risk and the Composition and Profitability of Agricultural Investments," Economic Journal, Royal Economic Society, vol. 103(416), pages 56-78, January.
    22. Fafchamps, Marcel & Quisumbing, Agnes R, 2005. "Marriage, Bequest, and Assortative Matching in Rural Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 347-380, January.
    23. Miles S. Kimball, 1991. "Precautionary Motives for Holding Assets," NBER Working Papers 3586, National Bureau of Economic Research, Inc.
    24. Dercon, Stefan, 1996. "Risk, Crop Choice, and Savings: Evidence from Tanzania," Economic Development and Cultural Change, University of Chicago Press, vol. 44(3), pages 485-513, April.
    25. Reardon, Thomas & Matlon, Peter & Delgado, Christopher, 1988. "Coping with household-level food insecurity in drought-affected areas of Burkina Faso," World Development, Elsevier, vol. 16(9), pages 1065-1074, September.
    26. M. Fafchamps & A. R. Quisumbing, 2002. "Control and Ownership of Assets Within Rural Ethiopian Households," Journal of Development Studies, Taylor & Francis Journals, vol. 38(6), pages 47-82.
    27. Mckay, Andrew & Lawson, David, 2003. "Assessing the Extent and Nature of Chronic Poverty in Low Income Countries: Issues and Evidence," World Development, Elsevier, vol. 31(3), pages 425-439, March.
    28. World Bank, 2005. "World Development Indicators 2005," World Bank Publications - Books, The World Bank Group, number 12426, December.
    29. Udry, Christopher, 1995. "Risk and Saving in Northern Nigeria," American Economic Review, American Economic Association, vol. 85(5), pages 1287-1300, December.
    30. Arne Bigsten & Abebe Shimeles, 2004. "Dynamics of Poverty in Ethiopia," WIDER Working Paper Series RP2004-39, World Institute for Development Economic Research (UNU-WIDER).
    31. Stefan Dercon & Pramila Krishnan, 2000. "Vulnerability, seasonality and poverty in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 25-53.
    32. Gollier, Christian & Pratt, John W, 1996. "Risk Vulnerability and the Tempering Effect of Background Risk," Econometrica, Econometric Society, vol. 64(5), pages 1109-1123, September.
    33. Ronelle Burger & Frikkie Booysen & Servaas van der Berg & Michael von Maltitz, 2006. "Marketable Wealth in a Poor African Country: Using an index of consumer durables to investigate wealth accumulation by households in Ghana," WIDER Working Paper Series RP2006-138, World Institute for Development Economic Research (UNU-WIDER).
    34. Florencia Torche & Seymour Spilerman, 2006. "Household Wealth in Latin America," WIDER Working Paper Series RP2006-114, World Institute for Development Economic Research (UNU-WIDER).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Burger, Ronelle & Booysen, Frikkie & Berg, Servaas van der & Maltitz, Michael von, 2006. "Marketable Wealth in a Poor African Country," MPRA Paper 9063, University Library of Munich, Germany.
    2. Ronelle Burger & Frikkie Booysen & Servaas van der Berg & Michael von Maltitz, 2006. "Marketable Wealth in a Poor African Country: Using an index of consumer durables to investigate wealth accumulation by households in Ghana," WIDER Working Paper Series RP2006-138, World Institute for Development Economic Research (UNU-WIDER).
    3. Nathan Morrow & Luca Salvati & Andrea Colantoni & Nancy Mock, 2018. "Rooting the Future; On-Farm Trees’ Contribution to Household Energy Security and Asset Creation as a Resilient Development Pathway—Evidence from a 20-Year Panel in Rural Ethiopia," Sustainability, MDPI, vol. 10(12), pages 1-24, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stefan Dercon, 2002. "Income Risk, Coping Strategies, and Safety Nets," The World Bank Research Observer, World Bank, vol. 17(2), pages 141-166, September.
    2. Nillesen, Eleonora & Verwim, Philip, 2010. "A Phoenix in Flames? Portfolio Choice and Violence in Civil War in Rural Burundi," WIDER Working Paper Series 044, World Institute for Development Economic Research (UNU-WIDER).
    3. Zimmerman, Frederick J. & Carter, Michael R., 2003. "Asset smoothing, consumption smoothing and the reproduction of inequality under risk and subsistence constraints," Journal of Development Economics, Elsevier, vol. 71(2), pages 233-260, August.
    4. Azomahou T.T. & Yitbarek E., 2015. "Poverty persistence and informal risk management: Micro evidence from urban Ethiopia," MERIT Working Papers 2015-006, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Eleonora Nillesen & Philip Verwimp, 2010. "A Phoenix in Flames? Portfolio Choice and Violence in Civil War in Rural Burundi," Research Working Papers 25, MICROCON - A Micro Level Analysis of Violent Conflict.
    6. Jan Willem Gunning & Paul Collier, 1999. "Explaining African Economic Performance," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 64-111, March.
    7. Emiliano Magrini & Pierluigi Montalbano, 2012. "Trade openness and vulnerability to poverty: Vietnam in the long-run (1992-2008)," Working Paper Series 3512, Department of Economics, University of Sussex Business School.
    8. Chris Elbers & Jan Willem Gunning & Bill Kinsey, 2007. "Growth and Risk: Methodology and Micro Evidence," The World Bank Economic Review, World Bank, vol. 21(1), pages 1-20.
    9. Strobl, Renate, 2022. "Background risk, insurance and investment behaviour: Experimental evidence from Kenya," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 34-68.
    10. Daniel Ayalew Mekonnen & Daniel Ayalew Mekonnen & Nicolas Gerber & Nicolas Gerber, 2016. "Aspirations and income, food security and subjective well-being in rural Ethiopia," FOODSECURE Working papers 51, LEI Wageningen UR.
    11. Gaurav, Sarthak, 2015. "Are Rainfed Agricultural Households Insured? Evidence from Five Villages in Vidarbha, India," World Development, Elsevier, vol. 66(C), pages 719-736.
    12. Emmanuel Skoufias & Sushenjit Bandyopadhyay & Sergio Olivieri, 2017. "Occupational diversification as an adaptation to rainfall variability in rural India," Agricultural Economics, International Association of Agricultural Economists, vol. 48(1), pages 77-89, January.
    13. Clarke, Daniel J. & Hill, Ruth Vargas, 2013. "Cost-benefit analysis of the african risk capacity facility:," IFPRI discussion papers 1292, International Food Policy Research Institute (IFPRI).
    14. Louis Eeckhoudt & Harris Schlesinger, 2006. "Putting Risk in Its Proper Place," American Economic Review, American Economic Association, vol. 96(1), pages 280-289, March.
    15. Jalan, Jyotsna & Ravallion, Martin, 2001. "Behavioral responses to risk in rural China," Journal of Development Economics, Elsevier, vol. 66(1), pages 23-49, October.
    16. Luigi Guiso & Tullio Jappelli, 1998. "Background Uncertainty and the Demand for Insurance Against Insurable Risks," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 23(1), pages 7-27, June.
    17. Linden McBride & Leah Bevis, 2019. "Working Paper 311 - Risk, Returns, and Welfare," Working Paper Series 2437, African Development Bank.
    18. Letta, Marco & Montalbano, Pierluigi & Tol, Richard S.J., 2018. "Temperature shocks, short-term growth and poverty thresholds: Evidence from rural Tanzania," World Development, Elsevier, vol. 112(C), pages 13-32.
    19. Gebremedhin, Tesfaye A., 2006. "The Dynamics of Poverty in Urban Ethiopia," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139737, Australian Agricultural and Resource Economics Society.
    20. Dercon, Stefan & Christiaensen, Luc, 2011. "Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 96(2), pages 159-173, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:rp2006-145. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.