Insuring consumption against Shocks: The role of informal savings in Nigeria

IF 6.8 1区经济学 Q1 AGRICULTURAL ECONOMICS & POLICY

Food Policy Pub Date : 2024-10-15 DOI:10.1016/j.foodpol.2024.102737

{"title":"Insuring consumption against Shocks: The role of informal savings in Nigeria","authors":"","doi":"10.1016/j.foodpol.2024.102737","DOIUrl":null,"url":null,"abstract":"<div><div>In most low-income countries, households are exposed to a plethora of economic shocks with welfare-reducing consequences. In the absence of well-functioning financial markets, most households rely on informal savings through credit clubs/groups to reduce their vulnerability to these shocks. In this paper, we examine the extent to which participation in informal savings associations affects the ability of households to smooth their consumption in the face of both idiosyncratic and covariate shocks. Using a difference-in-difference fixed effects specification on the Nigerian household-level panel that spans four waves over eight years, with data collected in 2010/2011, 2012/2013, 2015/2016 and 2018/2019, we documented heterogenous effects of informal savings. The results suggest that informal savings help households to hedge consumption against rainfall shocks. We find heterogeneous effects of informal savings in insuring consumption against idiosyncratic shocks, depending on whether households live in urban or rural areas. These results provide new insights into the role of informal financial arrangements in sub-Saharan Africa.</div></div>","PeriodicalId":321,"journal":{"name":"Food Policy","volume":null,"pages":null},"PeriodicalIF":6.8000,"publicationDate":"2024-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Food Policy","FirstCategoryId":"97","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0306919224001489","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"AGRICULTURAL ECONOMICS & POLICY","Score":null,"Total":0}

引用次数: 0

Abstract

In most low-income countries, households are exposed to a plethora of economic shocks with welfare-reducing consequences. In the absence of well-functioning financial markets, most households rely on informal savings through credit clubs/groups to reduce their vulnerability to these shocks. In this paper, we examine the extent to which participation in informal savings associations affects the ability of households to smooth their consumption in the face of both idiosyncratic and covariate shocks. Using a difference-in-difference fixed effects specification on the Nigerian household-level panel that spans four waves over eight years, with data collected in 2010/2011, 2012/2013, 2015/2016 and 2018/2019, we documented heterogenous effects of informal savings. The results suggest that informal savings help households to hedge consumption against rainfall shocks. We find heterogeneous effects of informal savings in insuring consumption against idiosyncratic shocks, depending on whether households live in urban or rural areas. These results provide new insights into the role of informal financial arrangements in sub-Saharan Africa.

查看原文本刊更多论文

使消费免受冲击：尼日利亚非正规储蓄的作用

在大多数低收入国家，家庭面临着大量的经济冲击，其后果会降低福利。在缺乏运作良好的金融市场的情况下，大多数家庭依赖于通过信贷俱乐部/小组进行非正式储蓄，以降低他们在这些冲击面前的脆弱性。在本文中，我们研究了参与非正规储蓄协会在多大程度上影响了家庭在面对特异性和共变量冲击时平滑消费的能力。我们对尼日利亚家庭层面的面板数据进行了差分固定效应规格化，数据收集于 2010/2011、2012/2013、2015/2016 和 2018/2019 年，时间跨度为八年四波。结果表明，非正规储蓄有助于家庭对冲降雨冲击对消费的影响。我们发现，非正规储蓄在保护消费免受特异性冲击方面具有不同的效果，这取决于家庭是生活在城市还是农村地区。这些结果为了解撒哈拉以南非洲非正规金融安排的作用提供了新的视角。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Food Policy 管理科学-农业经济与政策

CiteScore

11.40

自引率

4.60%

发文量

128

审稿时长

62 days

期刊介绍： Food Policy is a multidisciplinary journal publishing original research and novel evidence on issues in the formulation, implementation, and evaluation of policies for the food sector in developing, transition, and advanced economies. Our main focus is on the economic and social aspect of food policy, and we prioritize empirical studies informing international food policy debates. Provided that articles make a clear and explicit contribution to food policy debates of international interest, we consider papers from any of the social sciences. Papers from other disciplines (e.g., law) will be considered only if they provide a key policy contribution, and are written in a style which is accessible to a social science readership.