Household Consumption Volatility and Poverty Risk: Case Studies from South Africa and Tanzania
IMF Working Papers, March 6, 2020
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- Household Consumption Volatility and Poverty Risk: Case Studies from South Africa and Tanzania
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Bibliographic details
- Authors: Matthieu Bellon, Carlo Pizzinelli, Roberto Perrelli
- Published: March 6, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513527017.001
Overview and scope
- Title: Household Consumption Volatility and Poverty Risk: Case Studies from South Africa and Tanzania
- Authors: Matthieu Bellon, Carlo Pizzinelli, Roberto Perrelli
- Publication date: March 6, 2020
- Series and identifiers:
- IMF Working Papers
- Working Paper No. 2020/051
- Issue: 051
- Volume: 2020
- Pages: 41
- DOI: https://doi.org/10.5089/9781513527017.001
- Stock No: WPIEA2020051
- ISBN: 9781513527017
- ISSN: 1018-5941
Key findings
- Economic volatility is persistent in Sub Saharan Africa (SSA) and household-level shocks generate large consumption fluctuations that increase the incidence of poverty.
- Country characteristics determine which household-level shocks are most prevalent and which consumption-smoothing mechanisms are available.
- Tanzania:
- Agricultural shocks are an important source of consumption risk.
- Two thirds of households are involved in some level of agricultural production.
- South Africa:
- Labor market risk is emphasized, proxied by transitions from formal employment to informal work or unemployment.
- Access to credit, when available, and government transfers can effectively mitigate labor market shocks.
Research approach and measures
- Draws on micro-level data from South Africa and Tanzania to:
- Examine vulnerability to shocks across household types (for example, by education, ethnic group, and economic activity).
- Quantify the impact that reducing consumption volatility would have on aggregate poverty.
- Discuss coverage of consumption insurance mechanisms, including financial access and transfers.
Policy implications and mechanisms
- Consumption insurance mechanisms matter for poverty outcomes; coverage and effectiveness vary by country and shock type.
- Financial access (credit) and government transfers shown to be effective in mitigating labor market shocks in South Africa.
- Agricultural risk mitigation is a priority in Tanzania given the large share of households engaged in agriculture.
Subject tags and keywords (as provided)
- Subject: Consumption, Employment, Household consumption, Income, Labor, National accounts, Poverty
- Keywords: Africa, Consumption, consumption deviation, consumption fluctuation, consumption level, consumption loss, consumption volatility, counterfactual consumption allocation, Employment, food consumption, Household consumption, Income, Poverty, South Africa, Sub-Saharan Africa, Tanzania, WP
Source: IMF Working Paper — "Household Consumption Volatility and Poverty Risk: Case Studies from South Africa and Tanzania" (Matthieu Bellon, Carlo Pizzinelli, Roberto Perrelli), March 6, 2020; Working Paper No. 2020/051; DOI: https://doi.org/10.5089/9781513527017.001
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- Working Paper