Journal of African Economies - recent issues

Determinants of Children's Nutritional Status in Kenya: Evidence from Demographic and Health Surveys

Kabubo-Mariara, J., Ndenge, G. K., Mwabu, D. K. — 2009-05-29

This paper uses a pooled sample of the 1998 and 2003 Demographic and Health Survey data sets for Kenya to analyse the determinants of children's nutritional status. We investigate the impact of child, parental, household and community characteristics on children's height and on the probability of stunting. Descriptive and econometric analysis, augmented by policy simulations, is employed to achieve the objectives of the study. In estimation, we control for sample design and possible heterogeneity arising from unobserved community characteristics correlated with children's nutritional status and its determinants. The key findings are that boys suffer more malnutrition than girls, and children of multiple births are more likely to be malnourished than singletons. The results further indicate that maternal education is a more important determinant of children's nutritional status than paternal education. Household assets are also important determinants of children's nutritional status but nutrition improves at a decreasing rate with assets. The use of public health services, more-so modern contraceptives, is also found to be an important determinant of child nutritional status. Policy simulations affirm the potential role of parental, household and community characteristics in reducing long-term malnutrition in Kenya and suggest that the correct policy mix would make a substantial reduction in the current high levels of malnutrition. Our findings suggest that, if Kenya is to achieve her strategic health objectives and millennium development target of reducing the prevalence of malnutrition, strategies for poverty alleviation, promotion of post secondary education for women and provision of basic preventive health care are critical concerns that need to be addressed.

The Elimination of Madagascar's Vanilla Marketing Board, 10 Years on

Cadot, O., Dutoit, L., de Melo, J. — 2009-05-29

This paper explores how the elimination of Madagascar's Vanilla Marketing Board (VMB) in 1993 affected prices paid to farmers, incentives and indicators of poverty and inequality using household survey data and simulation analysis. Following the reforms, margins between FOB and farmgate prices have narrowed down, and the analysis of changes in poverty and inequality based on household surveys suggests a reduction in poverty and a muted supply response. A counterfactual analysis based on the observed reduction in intermediation margins shows that, however limited, increase in competition among intermediaries has contributed to raise purchase prices and the cash income of vanilla farmers. After taking into account the reduction in Madagascar's monopoly power on the world vanilla market implied by the elimination of the VMB, the induced rise in producer prices is estimated to have lifted about 20,000 individuals out of poverty.

Changes in Wage Distributions, Wage Gaps and Wage Inequality by Gender in Kenya

Agesa, R. U., Agesa, J., Dabalen, A. — 2009-05-29

Using data from Kenya, the determinants of gender differences in the overall distribution of earnings are estimated as part of explaining the positive association between the return to measured and unmeasured human capital attributes as formalised by human capital theory (Mincer in ‘Schooling Experience, and Earnings’, New York: National Bureau of Economic Research, Columbia University Press, 1974). The Kenyan data allows us to demonstrate that males possess relatively more human capital, and once gender differences in measured and unmeasured skills are accounted for, males receive relatively higher returns to both their measured and unmeasured human capital attributes. These findings support the notion that gender differences in the return to human capital trigger male and female earnings differences in Kenya.

A Gender-based Investigation into the Determinants of Labour Market Outcomes: Evidence from Uganda

Bridges, S., Lawson, D. — 2009-05-29

The under-utilisation of female labour in Uganda and other Sub-Saharan African countries is increasingly being stated as the next major obstacle to furthering poverty reduction and development in the region. Despite this, only a handful of papers have looked at labour supply issues for this region. This paper seeks to fill this gap. Here we use nationally representative household data from Uganda to model labour market outcomes for a representative sample of working aged individuals. We find that not only does ill health have a negative effect on an individual's decision to participate, it also acts as a constraint to participation in wage employment. In addition and perhaps more worryingly, the consequences of periods of ill health are greater for women than men.

Farm Input Use in a Context of Liquidity Constraints and Contract Unenforceability

Delpierre, M. — 2009-05-29

The African cash crop sector has witnessed widespread liberalisation reforms aimed at strengthening price incentives to farmers. However, some areas are confronted with a decline in input use. We have recourse to a two-stage Cournot game to account for the issue. In a context of credit rationing and imperfect contract enforceability, competition has the effect of tightening the input availability constraint while increasing the shadow value of credit. First, contrary to expectations, the impact of an extension of access to farm credit on aggregate input use, efficiency and peasants' income is shown to be ambiguous. Intuitively, relaxing the liquidity constraint entails a higher price elasticity of supply that results in a reduction of traders' profit margin. As a consequence, traders' incentives to contribute to input availability are weakened. The effects of subsidising inputs are also analysed. Second, normative insights are drawn regarding second best combinations of imperfect credit and output markets. Finally, the issue and consequences of contract unenforceability are discussed.

Universal Primary Education and School Entry in Uganda

Grogan, L. — 2009-02-17

This paper examines the initial effects of the introduction of Universal Primary Education (UPE) in January 1997 on school entry in Uganda. Given that advanced age at school entry has historically been associated with primary school dropout, the paper focuses on the the effects of fee elimination on the age at which a child enters school. Data from the 2000 Uganda Demographic and Health Survey and 2001 Education Data Survey are employed to examine the effects of UPE on the probability that a child begins attending school before age nine. School fee elimination under UPE is found to cause a 3% increase in this probability on average. Effects are found to be particularly pronounced for girls and children living in rural areas.

The Production of Child Health in Kenya: A Structural Model of Birth Weight

Mwabu, G. — 2009-02-17

The paper investigates birth weight and its correlates in Kenya using nationally representative data collected by the government in the early 1990s. I find that immunisation of the mother against tetanus during pregnancy is strongly associated with improvements in birth weight. Other factors significantly correlated with birth weight include age of mother at first birth and birth orders of siblings. It is further found that birth weight is positively associated with mother's age at first birth and with higher birth orders, with the firstborn child being substantially lighter than subsequent children. Newborn infants born in urban areas are heavier than those from rural areas and females are lighter than males. There is evidence suggesting that a baby born at a clinic is heavier than a newborn baby drawn randomly from the general population.

Forest Depletion and Food Security of Poor Rural Populations in Africa: Evidence from Cameroon

Gbetnkom, D. — 2009-02-17

Forests play an important role in contributing to the food security of a large portion of Africa's food insecure. However, under current practices, this contribution is not sustainable because forests are experiencing a high rate of depletion in this continent. This paper investigates the immediate factors of deforestation in Cameroon in relation to food security of poor populations. Quantitative estimates show that cocoa producer prices, food crop prices and timber export price index on one hand, and the oil boom, the structural adjustment policies and the devaluation of the CFA franc on the other hand are quite important in stimulating the clearing of forests. Equally, the agricultural value added per hectare increases the profitability of maintaining forests. Finally, food security has a negative relationship with forest depletion. Therefore, in order to protect the remaining forest areas and render the contribution of forests to food security sustainable, attention to non-forest policies should be a first-order priority in the future.

Trade Intensity and Business Cycle Synchronicity in Africa

Tapsoba, S. J.-A. — 2009-02-17

Business cycle synchronicity, which is the key requirement for sharing a common currency, is not particularly strong within the prospective African monetary unions. However, this parameter is not irrevocably fixed and may be endogeneous vis-à-vis the integration process. For example, trade may increase the similarity of economic disturbances. This paper tests such an effect among the 53 African countries from 1965 to 2004. The estimated results suggest that trade intensity increases the synchronisation of business cycles in the African context. The magnitude of the ‘endogeneity effect’ is, however, smaller than similar estimates among industrial countries.

Key Constraints for Rural Non-Farm Activity in Tanzania: Combining Investment Climate and Household Surveys

Jin, S., Deininger, K. — 2009-02-17

We use a survey of small rural enterprises from Tanzania to identify subjective as well as objective obstacles to expansion and productivity of the country's rural non-farm sector. Our results suggest that infrastructure constraints significantly reduce participation in the sector and investment and productivity by existing enterprises. Such constraints are particularly harmful for small enterprises, suggesting that policies to improve delivery of key public services can provide a basis for rural non-farm development, with possible knock-on effects on poverty reduction.

Surviving Unemployment Without State Support: Unemployment and Household Formation in South Africa

Klasen, S., Woolard, I. — 2008-12-17

While in many African countries open unemployment is largely confined to urban areas and thus overall rates are quite low, in South Africa open unemployment rates hover around 30%, with rural unemployment rates being even higher than that. This is despite the near complete absence of an unemployment insurance system and little labour market regulation that applies to rural labour markets. This paper examines how unemployment can persist without access to unemployment compensation. Analysing household surveys from 1993, 1995, 1998, 2004 and 2006, we find that the household formation response of the unemployed is the critical way in which the unemployed assure access to resources. In particular, unemployment delays the setting up of an individual household by young persons, in some cases by decades. It also sometimes leads to the dissolution of existing households and a return of constituent members to parents and other relatives and friends. Access to state transfers (in particular, non-contributory old age pensions) plays an important role in this private safety net. Some unemployed do not benefit from this safety net, and the presence of unemployed members pulls many households supporting them into poverty. We also show that the household formation response draws some of the unemployed away from employment opportunities, and thus lowers their employment prospects.

Leakage of Public Resources in the Health Sector: An Empirical Investigation of Chad

Gauthier, B., Wane, W. — 2008-12-17

In the public sector in developing countries, leakage of public resources could prove detrimental to users and affect the well-being of the population. This paper empirically examines the importance of leakage of government resources in the health sector in Chad, and its effects on the prices of drugs. The analysis uses data collected in Chad as part of a Health Facilities Survey organised by the World Bank in 2004. The survey covered 281 primary health care centres and contained information on the provision of medical material, financial resources and medicines allocated by the Ministry of Health to the regional administration and primary health centres. Although the regional administration is officially allocated 60% of the ministry's non-wage recurrent expenditures, the share of the resources that actually reach the regions is estimated to be only 18%. The health centres, which are the frontline providers and the entry point for the population, receive less than 1% of the ministry's non-wage recurrent expenditures. Accounting for the endogeneity of the level of competition among health centres, the leakage of government resources has a significant and negative impact on the price mark-up that health centres charge patients for drugs. Furthermore, it is estimated that had public resources earmarked for frontline providers reached them in their entirety, the number of patients seeking primary health care in Chad would have more than doubled.

Where Has All the Money Gone? Wealth and the Demand for Money in South Africa

Hall, S. G., Hondroyiannis, G., Swamy, P.A.V.B., Tavlas, G. S. — 2008-12-17

After an upward trend for about 25 years, the income velocity of money in South Africa reversed its course in 1994 and began a steep decline that continues to the present day. Some writers have argued that the change in income velocity is symptomatic of an unstable demand for money. The implication of this argument being that movements in the money supply provide little useful information about medium-to-long-term inflationary developments. We argue otherwise. Our basic premise is that there is a stable demand-for-money function but that the models that have been used to estimate South African money demand are not well specified because they do not include a measure of wealth. Using two empirical methodologies—a co-integrated vector equilibrium correction approach and a time-varying coefficient approach—we find that a demand-for-money function that includes wealth is stable. Consequently, our results suggest that the present practice of the South African Reserve Bank whereby M3 is used as an information variable in the Bank's inflation-targeting framework is well placed.

Food Priorities and Poverty: The Case of Smallholder Farmers in Rural Uganda

Pouw, N. R.M. — 2008-12-17

In this article, the food consumption patterns of poor rural smallholder farmers in Uganda are explored to see if they suggest useful ways for household welfare rankings. For this purpose, a ranking and testing procedure is developed to assert if people consume food items in a particular dominant order. The methodology is used to construct the so-called ‘hierarchy of menus’, which outline people's priorities over a given set of consumption items. These hierarchies are compared and contrasted across different locations and with formal household survey expenditure data. Furthermore, it is illustrated how information on food priorities and underlying welfare distributions can be combined into a cost-effective instrument for poverty monitoring and as input into policymaking.

Does Ethnicity Matter for Trust? Evidence from Africa

Zerfu, D., Zikhali, P., Kabenga, I. — 2008-12-17

This paper proposes that ethnicity coupled with ethnic nepotism may reduce interpersonal generalised trust. We use the 2001 wave of the World Values Survey data for eight African countries to test this claim, and show that while ethnicity and ethnic nepotism are each important in affecting generalised trust levels, their interaction has a self-reinforcing and negative effect on trust levels. The results underscore the importance of institutions in controlling ethnic nepotism and thus partly in mitigating the adverse effects of ethnicity on trust.

An Economic History of South Africa: Conquest, Discrimination and Development

Bluemenfeld, J. — 2008-12-17