The Invisible Hand of Rain in Spending: Effect of Rainfall‐Driven Agricultural Income on Per Capita Expenditure in Ghana

This paper uses a nationally representative household pseudo‐panel dataset for Ghana, a rain‐fed agriculture economy, to investigate whether there is a positive relationship between rainfall‐driven agricultural income and household per capita expenditure. By using the Two Stage Least Squares Instrumental Variable (2SLS‐IV) estimator, it is found that a fall in rainfall‐driven agricultural income leads to a decrease in per capita expenditure. The results show that the gender and the locality of the household head matter in the response of per capita expenditures to rainfall‐driven agricultural income. Female‐headed and rural households are more vulnerable to rainfall‐driven agricultural income changes. The expenditure disaggregation indicates that female‐headed households significantly reduce per capita non‐food expenditure in times of rainfall‐induced agricultural income decrease whilst the response of male‐headed households focuses more on reducing per capita food and remittance expenditures.     

Impacts of the COVID-19 crisis on single-person households in South Korea

Using nationally representative income and expenditure data from South Korea, we show that single-person households suffered a much greater decrease in household income and expenditure compared to multi-persons households during the COVID-19 pandemic in 2020. Negative effects on income were largest for the single-person households in ages 50—64, mostly driven by decreases in earned income rather than business income. There was no corresponding decrease in consumption expenditures, however, other than on transportation expenditure for young men. Notably, there were significant decreases in non-consumption expenditures that are related to formal and informal consumption-smoothing mechanisms, such as spending on insurances, pensions, and household transfers. Our findings highlight the disproportionately negative effects of the COVID-19 pandemic on the middle-aged single-person households. With reduced spending on consumption-smoothing mechanisms, this group is likely to be even more vulnerable to negative income shocks in the future.     

Personal savings,ethnicity and redistribution

The effects on personal savings of measures to equalise incomes are prominent in current policy debates. Both supporters and opponents of redistributive measures adopt the Keynesian position that greater income equality will itself reduce savings. However, not only income level affects household savings. Different ethnic groups have very different savings behaviour: surveys suggest that black households in the larger urban areas have a higher savings function than white households and a higher marginal propensity to save. Equalising incomes in South Africa implies shifting income to black households from white ones. In these circumstances redistributive measures could actually increase savings. These findings do not, however, point to specific measures to achieve that end or indicate how redistributive measures themselves could shift the savings functions of the various ethnic groups. Nor do they ensure that higher personal savings will translate efficiently into higher investment.     

Economic policy uncertainty and household consumption: Evidence from Chinese households

We find that households reduce their consumption in response to higher economic policy uncertainty (EPU). Compared with lower income households, high income group is more severely affected which can be explained by the portfolio choice of illiquid asset and liquid asset. In addition, the uncertainty effect is more pronounced among older, wealthier, well-educated and urban households. The impact of EPU on household consumption is also persistent. Holding more liquid asset and commercial insurance represent important channels in mitigating the negative effect of EPU on household consumption.     

An investigation into food-away-from-home consumption in South Africa

Food policy that ignores food-away-from-home (FAFH) in a developing country like South Africa will be misleading given changes in demand for food over time. This study contributes to our understanding of the factors that influence the demand for FAFH in South Africa. Using panel data from the Income and Expenditure Survey, this study analyses the effects of income and socio-demographic variables on FAFH expenditure using a double-hurdle model. The results show that small-sized households headed by younger white females/males and living in an urban settlement are most likely to purchase FAFH while male-headed households spend more than female-headed households. Furthermore, income of the household head is an important determinant of household FAFH expenditures. The income elasticity of expenditure on FAFH is inelastic and a normal good. The small size of the participation elasticities means that growth in the FAFH sector will be driven by households with existing expenditure.     

Effects of community,family, and education on earnings of black and white men

Summary The primary purpose of this paper was to determine the effect of background on the education and earnings of black and white men.It was largely motivated by a desire to quantify the extent to which past discrimination against Blacks, resulting in lower achievement, inhibits the progress of individuals today in a somewhat more benign environment.It has demonstrated that both community and family background factors are important in determining the levels of education and earnings of black and white men.The community effects for Blacks operate largely through their moving into more integrated neighborhoods, so that many positive community externalities are apparently not available to families in predominantly black middle-class neighborhoods.While the effects of father’s education, city origin, and community income are comparable between Blacks and whites, white men’s education is more affected by number of siblings, family income, and age of 1968 head of household than is black men’s education.The relative sizes of the coefficients of these latter variables are consistent with steeper age-earnings profiles for older white men than older black men and higher prices paid for investing in children by black parents.     

The Demand for Vices in Malaysia: An Ethnic Comparison Using Household Expenditure Data

A trivariate Tobit system is estimated to investigate the demand for vices (tobacco, alcohol, and gambling) in Malaysia. Estimation results, segmented by ethnicity, suggest that years of formal education, occupation type, and household head’s age negatively affect both the likelihood to spend and the overall amounts spent on tobacco by all Malaysians. Additionally, while higher income Malay households are more likely to spend and have higher tobacco expenditures, affluent Chinese and households of other races are more likely to spend and to spend more on smoking, drinking and gambling. Male-headed households of all races are more likely to spend and also spend more on smoking, drinking and gambling than female-led households.     

Beyond Income: What Else Predicts Very Low Food Security Among Children?

We examine characteristics and correlates of households in the United States that are most likely to have children at risk of inadequate nutrition—those that report very low food security (VLFS) among their children. Using 11 years of the Current Population Survey, plus data from the National Health and Nutrition Examination Survey (NHANES), we describe these households in great detail with the goal of trying to understand how these households differ from households without such severe food insecurity. While household income certainly plays an important role in determining VLFS among children, we find that even after flexibly controlling for income‐to‐poverty rates some household characteristics and patterns of program participation have important additional explanatory power. Finally, our examination of the NHANES data suggests an important role for both mental and physical health of adults in the household in determining the food security status of children.     

The Influence of Demographics and Household-Specific Price Indices on Consumption-Based Inequality and Welfare: A Comparison of Spain and the United States

Previous research has suggested that inequality is lower in Spain than in the United States when it is based on income. For the present article, both inequality and social welfare are examined, with household consumption expenditures used as a proxy for household welfare. For tractability, equivalence scales depended only on the number of people in the household. Household-specific price indices were used to express the 1990-1991 expenditure distributions in 1981 and 1991 winter prices. Our results reveal that inequality and welfare comparisons are drastically different for smaller and larger households. When all households are considered, the two-country comparison suggests that the income inequality ranking can only be maintained for expenditure distributions when economies of scale are small or nonexistent. However, welfare is always higher in the United States than in Spain. Because inflation during the 1980s in both countries was essentially distributionally neutral, all results appear to be robust to the choice of time period.     

Inequality of opportunity and household education expenditures: Evidence from panel data in China

This paper offers one of the first pieces of empirical evidence on the impact of inequality of opportunity on household education investment by using the panel data from China Family Panel Studies (CFPS) in three waves (2010, 2012 and 2014). Our result suggests that inequality of opportunity has a negative effect on household education expenditures. This result is robust to a series of robustness checks. Furthermore, for relatively disadvantaged households (household heads with less education, income, or rural hukou status), inequality of opportunity has a larger negative effect on their education expenditures. Policy suggestions to lower inequality of opportunity may include reducing labor market discrimination based on gender and hukou status, balancing education resources to create more equal educational opportunities, and offering children education subsidies in low-income families.     

Causal effects of family income on educational investment and child outcomes: Evidence from a policy reform in Japan

The Child Allowance Policy (CAP) in Japan, a nationwide cash transfer program for families with children, was designed to increase household expenditures toward children. Using unforeseen changes in the CAP that occurred due to the electoral results as a source of exogenous variation in income in the early 2010s, this paper examines the causal impact of family income on households’ private educational expenditures and child outcomes in the short-run, based on a longitudinal parent-child survey. The ordinary least squares (OLS) and first-differenced (FD) results show that family income is in most cases positively correlated with child's cognitive outcomes, and, to a lesser extent, with families’ educational expenditure on their children. Based on the FD instrumental variable (FD-IV) estimation, using unexpected changes in CAP payments as an instrument, we find positive income effects on educational expenditure in the short-run. However, we did not find statistically significant impacts on children's cognitive outcomes.     

Role of Education in Cigarette Smoking: An Analysis of Malaysian Household Survey Data*

Heckman's sample selection model is used to examine the role of education on household purchase decisions and expenditures of tobacco products in Malaysia. Results of the marginal effects of education, segmented by ethnic and gender groups, suggest that education decreases the probability, conditional levels and unconditional levels of tobacco expenditures amongst Malaysian households. Specifically, an additional year of education of the household head, irrespective of ethnic or gender considerations, decreases smoking probability by 1.5 percent. However, the negative effect of education seems to be higher for Chinese (US$1.07) than Malay (US$0.26) households in terms of conditional expenditures. Furthermore, education significantly decreases conditional tobacco expenditures within male‐headed households.     

Trends in living conditions and satisfaction among poorer older South Africans: objective and subjective indicators of quality of life in the October Household Survey

The majority of South Africa's older population is income poor and lives in multigeneration households. Since the first democratically elected government came into power in 1994, South Africans have been promised ‘a better life for all’. A range of policies and programmes has been implemented to improve the living standards and quality of life of the poor. The article asks how the older poor have benefited from government interventions in the period 1995–8. Drawing on data compiled from Statistics South Africa's household surveys in 1995 and 1998 (n=20 000–30 000 households), a set of over 35 objective and subjective indicators broken down by income and younger and older households is reviewed. Older households include at least one member over 60 years of age. Results show that access to services and opportunities improves systematically from poor to rich households. Major material gains for the poor and older households during the review period include access to clean water, electricity and home ownership. Older poor households with better access to services and opportunities are more likely to express overall satisfaction with their living circumstances. The study concludes that the most effective mechanism for poverty alleviation appears to be the non-contributory, means-tested state old-age pension, which lifts some households out of the most disadvantaged bottom income group. Policies under discussion promise further opportunities for empowering poor households with older members.     

The impact of circular migration on a village economy

The author examines the economy of a rural village in Indonesia in which a high proportion of households rely on remittances from urban informal sector earnings. Household income and per capita income are analyzed according to whether or not households have at least one temporary migrant, and by the sex and age of the household head. Findings indicate that "remittances from short-term circular migration push many households into the middle and upper income ranges. However, the wealthiest households continue to rely on traditional high earning activities and do not depend on remittances. The poorest households are scattered among those who rely on remittances and those still totally dependent upon traditional low earning village activities, regardless of the sex and age of the household head."     

Does health insurance promote people's consumption? New evidence from China

In order to change the situation that reimbursement rate of the new rural cooperative medical care system (NCMS) was too low to alleviate farmers medical burden, in August 2012, China began to expand the coverage of the NCMS to include the treatment of critical illnesses. Could more effective health insurance promote the consumption of rural residents? We studied the impact of the critical illness insurance (CII) on rural household consumption, and find that the CII increases per capita household daily consumption by >15%. But healthcare and medical expenditures have not been affected. Our comparison of outcomes for households with different levels of consumption and income shows the CII mainly promote the consumption of rural affluent family, but no incentive for poor family, resulting in deterioration of consumption inequality of rural households. The finding is robust to various alternative hypotheses and specifications.     

Food poverty,hunger and household production in rural Eastern Cape households

More than two decades since the advent of democracy in South Africa, the place of small-scale agriculture in rural development, poverty alleviation and food security remains ambiguous and highly contested. However, there is now some new evidence that official income poverty estimates in South Africa may be underestimating the contribution of rural, land-based livelihoods when measuring household well-being. This paper aims to explore this possibility further by identifying how household production activities are associated with improved food security among rural Eastern Cape households in the former homelands. The analysis is based on data from Statistics South Africa’s 2008/9 Living Conditions Survey and its annual General Household Surveys. In adopting a food poverty lens, the findings suggest that hunger levels are lower among farming households in the Eastern Cape even though a higher percentage of these households (relative to non-farming households) live below the national food poverty line. The paper concludes by discussing some implications for policy.     

Explaining The <Emphasis Type="Italic">Hump</Emphasis> In Life Cycle Consumption profiles

Summary  This paper documents life cycle (or age) profiles of (log) household income, durable and non-durable consumption for Dutch households after explicitly controlling for time (or business cycle) effects and birth cohort effects. We find that both measures of consumption as well as income is clearly hump shaped over the life cycle. Hence, real consumption per household seems to track income over the life cycle. This empirical regularity is hard to reconcile with basic specifications of the life cycle model. We further document life cycle profiles of demographic and labor supply variables. We argue that part, but not all, of the hump in consumption may be explained by household composition variables. Durable consumption per adult equivalent stays approximately flat until age 60 after which it drops dramatically. This phenomenon may be partly explained by a decrease in work related durable expenditures after retirement. Non-durable consumption per equivalent adult increases steadily until age 55 and stays approximately flat after that.      

Accessibility to microcredit by Chinese rural households

This paper examines the factors influencing the accessibility of microcredit by rural households in China. The empirical analysis utilises logistic regression, with data collected through a household survey carried out in one province in China. A total of twelve household-level factors are identified as determinants in households’ access to microcredit, including educational level, household size, income, among others. In addition to these, results indicate that rural households’ accessibility to microcredit can also be impaired by the supply-side factors (e.g., interest rates, loan processing time). The empirical analysis establishes a positive relationship between households’ credit demand and access to credit. The paper thus concludes that households should be encouraged to raise capital requirements (for example, create investment opportunities in on/off farm activities) to increase their demand for credit, which can enhance their access to microcredit. In addition, microcredit institutions (such as the Rural Credit Cooperatives) should improve their lending schemes and micro loan products to better suit the diversified needs of the rural population.     

E-commerce and Consumption Inequality in China

Consumption inequality may impede economic development and hinder the achievement of common prosperity. Using three waves of the China Family Panel Studies from 2014 to 2018, this paper investigated the impact of e-commerce on consumption inequality, as measured by the Kakwani index. The results indicate that e-commerce can reduce household consumption inequality. A mechanism analysis shows that e-commerce can narrow household income inequality, increase the purchasing power of low-income households, and promote the consumption of households with limited access to offline markets, thereby reducing the consumption gap. A heterogeneity analysis suggests that the positive role of e-commerce in reducing consumption inequality can be more significant among vulnerable households, such as households with elderly members and less-educated households. E-commerce can have varying impacts on consumption inequality across different subcategories of household expenditure, with the greatest impact seen in entertainment and education expenditure. These findings provide new evidence for the role of e-commerce in reducing consumption inequality in the digital economy, and the implications of this are discussed.     

Changing Sources of Household Income,Poverty, and Sectoral Inequality in Sri Lanka, 1990–2006

Comparing dynamic changes in household income and poverty among urban, rural, and estate sectors in Sri Lanka from 1990 to 2006, this study finds that a shift of household income away from farm to nonfarm sources is accompanied by a significant improvement in household income and reduction in poverty, particularly in the rural sector. Major contributing factors are the rise in returns to labor, in general, and educated labor, in particular, due to the development of the nonfarm labor market. Persistently low income among estate households can be explained primarily by the limited availability of nonfarm employment opportunities and the low education levels of working members.