Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98388
Authors: 
Kazianga, Harounan
Udry, Christopher
Year of Publication: 
2004
Series/Report no.: 
Center Discussion Paper 898
Abstract: 
This paper explores the extent of consumption smoothing between 1981 and 1985 in rural Burkina Faso. In particular, we examine the extent to which livestock, grain storage and interhousehold transfers are used to smooth consumption against income risk. The survey coincided with a period of severe drought, so that the results provide direct evidence on the effectiveness of these various insurance mechanisms when they are the most needed. We find evidence of little consumption smoothing. In particular, there is almost no risk sharing, and households rely almost exclusively on self-insurance in the form of adjustments to grain stocks to smooth out consumption. The outcome, however, is far from complete smoothing. Hence the main risk-coping strategies, which are hypothesized in the literature (risk sharing and buffer stock), were not effective during the survey period.
Subjects: 
Livestock
consumption smoothing
permanent income hypothesis
precautionary saving
risk sharing
JEL: 
D91
O16
Document Type: 
Working Paper

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