Are African Households Heterogeneous Agents?: Stylized Facts on Patterns of Consumption, Employment, Income and Earnings for Macroeconomic Modelers

Author/Editor:

Louise Fox

Publication Date:

May 6, 2015

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper reviews the evidence on how households in Sub-Saharan Africa segment along consumption, income and earning dimensions relevant for quantitative macroeconomic policy models which incorporate heterogeneity. Key findings include the importance of home-grown food in the income and consumption of house-holds well up the income distribution, the lack of formal financial inclusion for all but the richest households, and the importance of non-wage income. These stylized facts suggest that an externally-generated macroeconomic shock and the short-term policy response would mainly affect the behavior and welfare of these richer urban households, who are also more likely to have the means to cope. Middle class and poor households, especially in rural areas, should be insulated from these external shocks but vulnerable to a wide range of structural factors in the economy as well as idiosyncratic shocks.

Series:

Working Paper No. 2015/102

Subject:

English

Publication Date:

May 6, 2015

ISBN/ISSN:

9781484369968/1018-5941

Stock No:

WPIEA2015102

Pages:

36

Please address any questions about this title to publications@imf.org