Drought and saving in west Africa: Are livestock a buffer stock

Households in the west African semi-arid tropics, as in much of the developing world, face substantial risk-- an inevitable consequence of engaging in rainfed agriculture in a drought-prone environment. It has long been hypothesized that these households keep livestock as a buffer stock to insulate their consumption from fluctuations in income. This paper has the simple goal of testing that hypothesis. Our results indicate that livestock transactions play less of a consumption smoothing role than is often assumed. Livestock sales compensate for at most thirty percent, and probably closer to twenty percent of income shortfalls due to village-level shocks alone. We discuss possible explanations for these results and suggest directions for future work

Drought and Saving in West Africa: Are Livestock a Buffer Stock?

Households in the west African semi-arid tropics face substantial risk -- an inevitable consequence of engaging in rainfed agriculture in a drought-prone environment. It has long been hypothesized that these households keep livestock as a buffer stock to insulate their consumption from income fluctuations income. This paper tests this hypothesis. Results indicate that livestock transactions play less of a consumption smoothing role than often assumed. Livestock sales compensate for at most thirty percent, and probably closer to twenty percent of income shortfalls due to village-level shocks alone. We discuss possible explanations for these results and suggest directions for future work.