The Effect of Education on Households Spending Choices and Poverty Status in Burkina Faso: Evidence from the 2009 Survey on Household Living Conditions

Abstract

This study contributes to the overall debate on education and development, and is concerned with analyzing the effect of educational attainment on households per-capita spending choices, and the reflection of those spending choices on households poverty status in Burkina Faso. In this formulation, a household is said to be experiencing monetary poverty if its annual per-capita consumption spending is less than the poverty line of 130,375 CFA Franc. The study uses the 2009 National Survey on Household Living Conditions administered by the National Institute for Statistics and demography (INSD), along with a Random Utility modeling framework to explain households' per-capita consumption choices and thus poverty status. We then specify multivariate probit and logit models to describe the choice probabilities, and uncover the parameters using Maximum Likelihood Methods. The results show that education, along with other covariates is a key determinant of households' spending choices and poverty status in Burkina Faso. In fact, compared to households with uneducated heads, those headed by someone with a primary, secondary, and higher education are respectively 1.45 times, 4.13 times, and 18.04 times more likely to spend a per-capita amount above the poverty threshold of 130,375 CFA franc. These results suggest that education could successfully be used as an effective policy tool to reduce the incidence of chronic poverty in Burkina Faso.