Decomposition of Household Expenditure and Child Welfare in Rural Ethiopia

The methodology by Lazear and Michael (1988) is used to decompose household expenditures into that for adults and children. Some specific estimation procedures are modified and cross section-time series (panel) data are used to control for household level heterogeneity. In addition, a new and approximate test for the estimated ratios is applied. The empirical results indicate that even though per child and total child expenditures are increasing with income the relative expenditure on children falls with it. The ratio of child to adult expenditures for female-headed households is less than for male-headed households. While households with a larger number of children expend more on children in per capita terms, the number of adults is negatively related to expenditures per child. Siblings of the spouses have a significant impact on the expenditures on children; particularly, siblings of the wife seem to compete with her children. The completion of primary education by both spouses positively affects relative expenditures on children. Intergenerational effects, through education and wealth, are also important. Pre-marriage wealth, particularly for the female spouse, positively affects allocations to children. Length of marriage and the existence of a written marriage contract increase relative expenditures on children. Both measures reflect stability of marriage indicating that ‘optimal’ matching in the marriage market is an important determinant of intra-household allocations. Individual level fixed effects regressions indicate that weight-for-height z-scores of children are more correlated to the estimated expenditures on children than with total household expenditure. This result on the one hand underscores the importance of intra-household allocations, and on the other shows that the estimated expenditures on children and the underlying assumption used to derive them are not off the mark.Ethiopia; intra-household allocation; child health

Land reform distribution of land & institutions in rural Ethiopia: analysis of inequality with dirty data

There are two either explicitly or implicitly and widely accepted ideas about the distribution of land in Ethiopia after the reform of 1975. First, land distribution in rural Ethiopia is highly equitable, for example compared to other African countries where private ownership exists. Second, the land distribution pattern currently observed is basically explained by what happened after the reform; hence, pre-reform tenures do not help us understand post-reform land distribution. This paper questions both these ideas. Using formal inequality indexes and a methodology that explicitly considers measurement errors, the empirical results indicate that both inter- and intra-regional inequalities are high; inequality in the distribution of land is as high as or even higher than other African countries. The paper also argues that the post-reform distribution is likely influenced by pre-reform distribution and calls for a more detailed historical analysis that attempts to understand the link between old tenure structures and land distribution after the land reform

Interactions between short- and long-term health of children: A case from rural Ethiopia

2008

Intra-household Distribution of Expenditures in Rural Ethiopia: A Demand Systems Approach

This paper examines the combined effects of changes in prices, income and demographic composition on adult and young, male and female members of households. The recently developed Quadratic Almost Ideal Demand System (QUAIDS) is used since a demand system provides a unified framework for analysing the combined effects in a systematic fashion. The ‘outlay equivalent method’, which was used with single demand equations in previous studies, is married to the demand system literature. Underlying preference structures for classifying goods into different groups is also examined by conducting alternative tests of separability in preferences. Panel/longitudinal data are used helping to control for household level heterogeneity. The empirical results show that Ethiopian rural households respond to price, income and demographic changes in a more complicated manner than usually assumed; demographic groups absorbing most of the impact differ for different types of changes. Changes in household income affect male members of households (men and boys) more than female members (women and girls). On the other hand, changes in price affect women and boys more than men and girls. In addition, adjustments in household expenditure due to demographic changes imply that boys are favoured relative to girls. But the overall position of boys and girls in the household depends not only on the ‘outlay equivalent ratios’ but also on the effects of changes in household income and prices as determined by budget and price elasticities. These findings show that households distribute risks among different demographic groups rather than only one group absorbing all shocks. The findings indicate that studies that only looked at the ‘outlay equivalent ratios’ tell only part of the story.Ethiopia; demand systems; intra-household allocations; separability tests

Envy and Agricultural Innovation: An Experimental Case Study from Ethiopia

CSAE working paper WPS/2011-0

The Limits to Common Resource Management: The Bypassed Commons or Commons without Tragedy

Land, labor, indigenous knowledge and institutional resources of producers in the Central Highlands of Ethiopia are investigated. Frequency distribution and comparative statistical analysis of the two regions with respect to these and other parameters suggest that in a situation where all producers are subjected to a common source of risk (e.g. rainfall): i) the institutional resources become less effective, and ii) combination of land, labor, knowledge and other complementary resources form the basis for adjustment mechanisms, sequential or strategic decisions, and that these decisions are directed towards maintaining the nuclear family. On the other hand, when essential resources such as land are government owned and household decisions are shared by the state, local institutions or social networks become an effective means to maintain reproduction of the farm and the producer through providing access to or sharing of resources.Land; labor; indigenous knowledge; institutional resources; producers; Ethiopia; risk ; adjustment mechanisms; sequential or strategic decisions

Subjective well-being, disability and adaptation: a case study from rural Ethiopia

In many developing countries poor infrastructure – including sanitation and health facilities – exposes the population to high risks of disability. Low standards of health and safety at work and at home, coupled with political, ethnic, and domestic violence, also contribute to raising the risk of becoming physically disabled. The effect of physical disability on people’s lives is likely to be worse than in developed economies because of the reliance on physical labour for income generation – for example, in farming. Higher levels of national income and technological capability may also enable societies to make the investments required to enable disabled individuals to be productively employed. Finally, since formal social insurance is usually lacking in developing countries, the effect of disability on welfare is expected to be higher as disabled people must rely on social networks that have limited capacity to pool risks