http://repub.eur.nl/res/aut/22396/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/37225/ 2012-09-04T00:00:00Z This article explores the determinants of road traffic crash fatalities in India. In addition to income, the analysis considers the sociodemographic population structure, motorization levels, road and health infrastructure and road rule enforcement as potential factors. An original panel data set covering 25 Indian states is analyzed using multivariate regression analysis. Time and state fixed-effects account for unobserved heterogeneity across states and time. The rising motorization, urbanization and accompanying increase in the share of vulnerable road users, that is, pedestrians and two-wheelers, are the major drivers of road traffic crash fatalities in India. Among vulnerable road users, women form a particularly high-risk group. Higher expenditure per police officer is associated with a lower fatality rate. The results suggest that India should focus, in particular, on road infrastructure investments that allow the separation of vulnerable from other road users on improved road rule enforcement and should pay special attention to vulnerable female road users. http://repub.eur.nl/res/pub/32423/ 2012-07-01T00:00:00Z The informal sector is typically characterized as being very heterogeneous and possibly composed of two clearly distinct segments, sometimes called the lower and upper tiers. However, empirical evidence shows that even among lower tier entrepreneurs profitability can be quite high. We combine these findings and develop an innovative approach to identify what we call " constrained gazelles" , next to the well-known survivalists in the lower tier and growth-oriented top-performers in the upper tier. Our sample of informal entrepreneurs in seven West-African countries allows to link the relative size of these three groups to the structural and macroeconomic environment in these countries. http://repub.eur.nl/res/pub/31826/ 2012-03-09T00:00:00Z The informal sector is typically characterised as being very heterogeneous and possibly composed of two clearly distinct segments, sometimes called the lower and upper tier. However, empirical evidence shows that even among lower tier entrepreneurs profitability can be quite high. We combine these findings and develop an innovative approach to identify what we call ‘constrained gazelles’, next to the well-known survivalists in the lower tier and growth-oriented top-performers in the upper tier. Our sample of informal entrepreneurs in seven West-African countries allows to link the relative size of these three groups to the structural and macroeconomic environment in these countries. http://repub.eur.nl/res/pub/30884/ 2012-01-13T00:00:00Z Objective: This paper explores the determinants of road traffic crash fatalities in India. As potential factors, the analysis considers, besides income, the sociodemographic populationstructure, motorization levels, road and health infrastructure and road rule enforcement. Methods: An original panel data set covering 25 Indian states is analyzed using multivariate regression analysis. Time and state fixed effects account for unobserved heterogeneity across states and time. Results: Rising motorization, urbanization and the accompanying increase in the share of vulnerable road users, i.e. pedestrians and two-wheelers, are the major drivers of road traffic crash fatalities in India. Among vulnerable road users, women form a particularly high risk group. Higher expenditure per policeman is associated with a lower fatality rate. Conclusion: The results suggest that India should focus, in particular, on road infrastructure investments that allow the separation of vulnerable from other road users, on improved road rule enforcement and should pay special attention to vulnerable female road users. http://repub.eur.nl/res/pub/34709/ 2012-01-01T00:00:00Z Micro and small enterprises (MSEs) in developing countries are typically considered to be severely credit constrained. Additionally, high business risks may partly explain why the capital stocks of MSEs remain low. This article analyzes the determinants of the capital stocks of MSEs in poor economies focusing on credit constraints and risk. The analysis is based on a unique, albeit cross-sectional but backward‐looking, micro data set on MSEs covering the economic capitals of seven West‐African countries. The main result is that capital market imperfections indeed seem to explain an important part of the variation in capital stocks in the early lifetime of MSEs. Furthermore, the analyses show that risk plays a key role in capital accumulation. Risk-averse individuals seem to adjust their initially low capital stocks upwards when enterprises grow older. MSEs in risky activities owned by wealthy individuals even seem to over-invest when they start their business and subsequently adjust capital stocks downwards. As other firms simultaneously suffer from capital shortages, such behavior may imply large inefficiencies. http://repub.eur.nl/res/pub/34753/ 2012-01-01T00:00:00Z The food crisis encountered in 2002 in Malawi was arguably one of the worst in the recent history of the country. The World Food Programme estimated that between 2.1 and 3.2 million people were threatened by starvation. Despite this assumed severity, not much research on the actual consequences of the crisis has been carried out so far. In order to fill this gap, this paper aims to identify the effects of the 2002 food crisis on the health status of the very young children exposed to it. Given the lack of longitudinal data and data collected during the crisis, assessing the potential impact of the 2002 events and the emergency aid that followed is challenging. We rely on representative data collected before and after the crisis and various methods from the impact evaluation literature to create a counterfactual in order to assess the implications of the crisis. Our analysis indicates that the net impact of the crisis was surprisingly low. Under-five excess mortality must have been below the 10,000 crisis-induced deaths suggested by some NGOs.Moreover, we also do not find any general and lasting loss in weight or height of children below the age of five. Nevertheless, if we disaggregate our sample population further by age and gender, we do find some nutritional impacts, both positive and negative. The positive effects identified seem to be the result of the combined influence of selective mortality and effective aid and policy interventions responding to the crisis. http://repub.eur.nl/res/pub/34820/ 2012-01-01T00:00:00Z Abstract. An equitable distribution of health care use, distributed according to people’s needs instead of ability to pay, is an important goal featuring on many health policy agendas worldwide. However, relatively little is known about the extent to which this principle is violated across socio-economic groups in Sub Saharan Africa (SSA). We examine cross-country comparative micro-data from eighteen SSA countries and find that (a) considerable inequalities in health care use exist and vary across countries, but that (b) identifying the extent to which these inequalities are unfair, i.e. do not correspond to inequalities in need, is not straightforward to ascertain with the conventional tools. These tools include rank-based measures such as the concentration index and the index of inequity. The two main concerns when using conventional tools to measure equity are (i) the reporting heterogeneity in self-reported health variables across socio-economic groups and (ii) the weak relationship between need and use. We show that the use of subjective self-reports of health leads to much lower measured degrees of socio-economic inequalities than those obtained using more objective indicators. This leads to an underestimation of the degree of inequity when using self-reported health measures. The observed weak relationship between indicators of ill-health and use of health care does not appear to provide an estimate of the adequate response to needs, which further puts a downward bias on equity measures. In all countries, apart from the more developed Mauritius, health care use is distributed according to wealth rather than to need. A better match of needs and use is realized in those countries with better governance and more physicians but, perhaps surprisingly, not those with greater urbanization. Given the importance of equity in many health policies worldwide, it is vital to develop more robust equity measures relevant to low income settings. http://repub.eur.nl/res/pub/38423/ 2012-01-01T00:00:00Z We investigate the returns to capital and capital accumulation using panel data of Peruvian micro enterprises (MEs). Marginal returns to capital are found to be very high at low levels of capital, but rapidly decreasing at higher levels. The dynamic analyses of capital accumulation in MEs suggest that credit constraints explain a major part of the variation in firm growth. We find a very large positive effect of household non-business wealth on capital stocks of MEs. We also show a sizable effect of risk on accumulation and pronounced interactions between wealth and risk. The presented evidence is consistent with poorly endowed entrepreneurs who operate in imperfect capital markets and a very risky environment. http://repub.eur.nl/res/pub/39061/ 2012-01-01T00:00:00Z Micro and small enterprises (MSEs) in developing countries are typically considered to be severely credit constrained. Additionally, high business risks may partly explain why the capital stocks of MSEs remain low. This article analyzes the determinants of the capital stocks of MSEs in poor economies focusing on credit constraints and risk. The analysis is based on a unique, albeit cross‐sectional but backward‐looking, micro data set on MSEs covering the economic capitals of seven West‐African countries. The main result is that capital market imperfections indeed seem to explain an important part of the variation in capital stocks in the early lifetime of MSEs. Furthermore, the analyses show that risk plays a key role in capital accumulation. Risk‐averse individuals seem to adjust their initially low capital stocks upwards when enterprises grow older. MSEs in risky activities owned by wealthy individuals even seem to over‐invest when they start their business and subsequently adjust capital stocks downwards. As other firms simultaneously suffer from capital shortages, such behaviour may imply large inefficiencies. http://repub.eur.nl/res/pub/39062/ 2012-01-01T00:00:00Z Building on the literature on multidimensional poverty, we propose stochastic dominance tests for multiperiod poverty that allow poverty orderings to be established over time and space that are robust to the chosen poverty measure, poverty line, and aggregation procedure. These tests imply the creation of dominance surfaces for different time spans and testing for significant differences. We elaborate the method first for the bi-dimensional case, using as the dimensions income observed over two periods: One at the beginning and another at the end of a time span. Subsequently, we extend it to the case, where incomes are observed over n periods. We illustrate our approach by performing poverty comparisons by using data for Indonesia and Peru. The discussion is embedded in the literature on chronic poverty. http://repub.eur.nl/res/pub/26272/ 2011-08-01T00:00:00Z Household income has been shown to matter for children's school enrolment, in particular in settings where households face tight liquidity constraints caused by the lack of insurance and limited possibilities to smooth consumption through credit and savings. However, so far only few studies have made an effort to quantify the income elasticity of school enrolment, in particular in the Sub-Saharan African context. The empirical problem in identifying the causal impact of income on enrolment is to control for parental ability, which is largely unobserved, and to deal with reverse causality and measurement error. This paper uses for identification a natural experiment in Burkina Faso, a country with particularly low enrolment rates. The results show that naive estimates largely underestimate the true income elasticity of school enrolment. The results can provide a basis for safety net policies. http://repub.eur.nl/res/pub/26694/ 2011-07-01T00:00:00Z Empirical evidence suggests that regional disparities in income are often very wide, that these disparities do not necessarily disappear as economies grow and that these disparities are themselves a major driver of growth. We use a novel approach based on multilevel modelling to decompose the sources of inequality in household incomes in Burkina Faso. We show that differences in income across space are explained not only by the spatial concentration of households with favourable characteristics but to a large extent also by disparities in community endowments. Climatic differences across regions do matter, also, but to a much smaller extent. On the basis of the findings, it would be worth assessing the potential effects of policies which build and enhance infrastructure that connects communities complemented by interventions targeted to specific villages that particularly lag behind. http://repub.eur.nl/res/pub/31435/ 2011-07-01T00:00:00Z This paper investigates the effects of inequality in health on economic growth in low and middle income countries. The empirical part of the paper uses an original cross-national panel data set covering 62 low and middle income countries over the period 1985 to 2007. I find a substantial and relatively robust negative effect of health inequality on income levels and income growth controlling for life expectancy, country and time fixed-effects and a large number of other effects that have been shown to matter for growth. The effect also holds if health inequality is instrumented to circumvent a potential problem of reverse causality. Hence, reducing inequality in the access to health care and to health-related information can make a substantial contribution to economic growth. http://repub.eur.nl/res/pub/26334/ 2011-05-11T00:00:00Z This article uses panel cointegration and causality techniques to examine the long run relationship between foreign aid and private investment. Our main result is that aid has a statistically significant negative effect on private investment. This result is robust to outliers, different measures and forms of aid, sample selection and the sample period. In addition, we find that long run causality runs in both directions, suggesting that an increase in aid reduces private investment and that, in turn, higher private investment leads to lower aid inflows. http://repub.eur.nl/res/pub/25847/ 2011-05-01T00:00:00Z This paper investigates the patterns of capital entry barriers and capital returns in informal micro and small enterprises (MSEs) using a unique micro dataset for seven West African countries. Our findings support the view of a heterogeneous informal sector that is not primarily host to subsistence activities. While an assessment of initial investment identifies some informal activities with negligible entry barriers, a notable cost of entry is associated with most activities. We find very heterogeneous patterns of capital returns in informal MSEs. At very low levels of capital, marginal returns are extremely high-often exceeding 70 percent per month. Above a capital stock of 150 International Dollars, marginal returns are found to be relatively low at around 4-7 percent monthly. We provide some evidence that the high returns at low capital stocks reflect high risks. At the same time, most MSEs appear to be severely capital constrained. © 2011 The Authors. Review of Income and Wealth http://repub.eur.nl/res/pub/34714/ 2011-01-01T00:00:00Z Abstract: This paper investigates the dynamics of the informal sector in Madagascar during a period of fragile growth. Overall, the behavior of informal firms in terms of earnings, employment and capital accumulation points to a degree of heterogeneity which goes beyond a simple dualistic model and even a more refined model that would distinguish between an upper entrepreneurial and a lower subsistence tier within the informal sector. However, in line with the dualistic model, the informal sector indeed fulfils a labor absorbing function in times of crisis. During the growth period we see capital accumulation in most of the sectors and lots of evidence that households expand their activities. However, this happens mainly through the creation of new firms instead of the expansion of existing ones, which is consistent with much higher returns at very low levels of capital. More rapid expansion can be observed in sectors that operate with lower capital intensity, which is also consistent with risk or credit constraints as major deterrents to expansion. While there is some indication that total factor productivity increased over time, returns to capital and labor where not higher at the end of the observation period than at the beginning. Returns are also rather low at high levels of capital. These findings point to a limited growth potential of the informal sector as a whole. The heterogeneity in capital returns hints at large inefficiencies in allocating capital across informal firms. http://repub.eur.nl/res/pub/34751/ 2011-01-01T00:00:00Z This baseline report is part of an evaluation commissioned by the Policy and Operations Evaluation Department (IOB) of the Netherlands Ministry of Foreign Affairs. It belongs to a series of impact evaluations of renewable energy and development programmes supported by the Netherlands, with a focus on the medium and long term effects of these programmes on end-users or final beneficiaries. A characteristic of these studies is the use of mixed methods, being quantitative research techniques, in combination with qualitative techniques, to get insight in the magnitude of effects. The purpose of the impact evaluations is to account for assistance provided and to draw lessons from the findings for improvement of policy and policy implementation. The results of these impact evaluations will be input to a policy evaluation of the “Promoting Renewable Energy Programme” (PREP) to be concluded in 2014. http://repub.eur.nl/res/pub/34755/ 2011-01-01T00:00:00Z This paper uses panel cointegration and causality techniques to examine the long-run relationship between foreign aid and private investment. Our main result is that aid has a statistically significant negative effect on private investment. This result is robust to outliers, different measures and forms of aid, sample selection, and the sample period. In addition, we find that long-run causality runs in both directions, suggesting that an increase in aid reduces private investment and that, in turn, higher private investment leads to lower aid inflows. http://repub.eur.nl/res/pub/19841/ 2010-06-04T00:00:00Z In low and middle income countries road traffic accident fatalities will become in the near future one of the three major causes of death. Given that in particular the active population accounts for these fatalities, the potential economic implications are large, on the micro and the macro level. Yet, so far not much is known about the determinants and economic consequences of low road safety, in particular about the factors influencing road users’ behavior. Obviously this makes the design of interventions to prevent road traffic accidents and to care for the victims a serious challenge. The objective of this note is to summarize and review the existing knowledge on the determinants of road traffic accident fatalities, to identify the relevant research gaps in particular for low and middle income countries and to suggest ways to collect data and to conduct experiments that help to close these gaps. We also present a cross-country analysis of the determinants of road traffic accident fatalities that takes into account a wide range of potential environmental, economic and social factors. http://repub.eur.nl/res/pub/19643/ 2010-06-01T00:00:00Z One of the most frequent critiques of the HDI is that is does not take into account inequality within countries in its three dimensions. In this paper, we apply a simply approach to compute the three components and the overall HDI for quintiles of the income distribution. This allows a comparison of the level in human development of the poor with the level of the non-poor within countries, but also across countries. This is an application of the method presented in Grimm et al. (World Development 36(12):2527-2546, 2008) to a sample of 21 low and middle income countries and 11 industrialized countries. In particular the inclusion of the industrialized countries, which were not included in the previous work, implies to deal with a number of additional challenges, which we outline in this paper. Our results show that inequality in human development within countries is high, both in developed and industrialized countries. In fact, the HDI of the lowest quintiles in industrialized countries is often below the HDI of the richest quintile in many middle income countries. We also find, however, a strong overall negative correlation between the level of human development and inequality in human development. http://repub.eur.nl/res/pub/22374/ 2010-05-06T00:00:00Z Over the past two decades poverty research has focused in particular on poverty dynamics—over the course of a life and generations - and on multi-dimensional, sometimes also cross-disciplinary, approaches. Progress in these directions has been made possible by more and better data, in particular longitudinal data and data that cover various dimensions of human well-being. However, not much effort has been made to integrate these different approaches. ... http://repub.eur.nl/res/pub/19426/ 2010-05-01T00:00:00Z This paper investigates the effects of inequality in health on economic growth in low and middle income countries. The empirical part of the paper uses an original cross-national panel data set covering 62 low and middle income countries over the period 1985 to 2007. I find a substantial and relatively robust negative effect of health inequality on income levels and income growth controlling for life expectancy, country and time fixed-effects and a large number of other effects that have been shown to matter for growth. The effect also holds if health inequality is instrumented to circumvent a potential problem of reverse causality. Hence, increasing access to health care for the poor can make a substantial contribution to economic growth not only through its effect on life expectancy but also through its effect on reduced health inequality. http://repub.eur.nl/res/pub/22386/ 2010-04-01T00:00:00Z In contrast to health shocks, mortality shocks do not only induce direct costs such as medical and funeral expenses and possibly income loss, but also reduce the number of consumption units in the household. Using data from Indonesia, it is shown that the economic costs related to the death of children and older persons seem to be fully compensated for by the decrease in consumption units. In contrast, when prime-age adults die, survivors face additional costs and, in consequence, use coping strategies. These strategies seem to be quite effective, although households may face higher long-term vulnerability. http://repub.eur.nl/res/pub/18704/ 2010-01-01T00:00:00Z In 2002 Malawi experienced a serious shortage of cereals due to adverse climatic conditions. The World Food Programme assumed that about 2.1 to 3.2 million people were threatened of starvation at that time. However, not much research has been undertaken to investigate the actual consequences of this crisis. In particular, little is known about how the crisis affected the health status of children. Obviously, quantifying the health impact of such a crisis is a serious task given the lack of data and the more general problem of relating outcomes to specific shocks and policies. In this paper a difference-in-difference estimator is used to quantify the impact of the food crisis on the health status of children. The findings suggest that at least in the short run, there was neither a significant impact on child mortality nor on malnutrition. This would suggest that the shock might have been less severe than initially assumed and that the various policy interventions undertaken at the time have been effective or at least sufficient to counteract the immediate effects of the crisis. http://repub.eur.nl/res/pub/19701/ 2010-01-01T00:00:00Z http://repub.eur.nl/res/pub/34781/ 2010-01-01T00:00:00Z Abstract – Previous research has shown that in many low and middle income countries micro and small entrepreneurs achieve relative high marginal returns to capital but show only very low reinvestment rates. Existing research is rather inconclusive about the possible causes. We explore whether forced solidarity, i.e. abusive demands by the family and kin hinder entrepreneurs to save and to invest. We start from a relatively simple theoretical model in which households consume and pursue different income generating activities, mainly the production of goods and services and the engagement in dependent wage work outside the household. Value added of the household business is subject to a solidarity tax imposed by the household’s wider family and kin-group. In this model a higher solidarity tax leads to a reallocation of productive resources away from household production to other income generating activities and leisure. We use an original data set of West-African migrant entrepreneurs to see whether the empirical observation is consistent with the predictions of the model. We find some evidence that family and kinship structures within the city enhance labour effort and the use of capital. However, closeness to the area of origin seem to have adverse effects on both. http://repub.eur.nl/res/pub/18721/ 2009-04-01T00:00:00Z I analyze the impact of food price inflation on parental decisions to send their children to school.* Moreover, I use the fact that food crop farmers and cotton farmers were exposed differently to that shock to estimate the income elasticity of school enrolment. The results suggest that the shock-induced loss in purchasing power had an immediate effect on enrolment rates. Instrumental variable estimates show that the effect of household income on children’s school enrolment is much larger than a simple OLS regression would suggest. Hence, policies to expand education in Sub-Saharan Africa should not neglect the demand side. http://repub.eur.nl/res/pub/18722/ 2009-04-01T00:00:00Z One of the most frequent critiques of the HDI is that is does not take into account inequality within countries in its three dimensions. In this paper, we apply a simply approach to compute the three components and the overall HDI for quintiles of the income distribution. This allows a comparison of the level in human development of the poor with the level of the non-poor within countries, but also across countries. This is an application of the method presented in Grimm et al. (2008) to a sample of 21 low and middle income countries and 11 industrialized countries. In particular the inclusion of the industrialized countries, which were not included in the previous work, implies to deal with a number of additional challenges, which we outline in this paper. Our results show that inequality in human development within countries is high, both in developed and industrialized countries. In fact, the HDI of the lowest quintiles in industrialized countries is often below the HDI of the richest quintile in many middle income countries. We also find, however, a strong overall negative correlation between the level of human development and inequality in human development. http://repub.eur.nl/res/pub/18725/ 2009-02-01T00:00:00Z Empirical evidence suggests that regional disparities in incomes are often very high, that these disparities do not necessarily disappear as economies grow and that these disparities are itself an important driver of growth. We use a novel approach based on multilevel modeling to decompose the sources of spatial disparities in incomes among households in Burkina Faso. We show that spatial disparities are not only driven by the spatial concentration of households with particular endowments but to a large extent also by disparities in community endowments. Climatic differences across regions do also matter, but to a much smaller extent. http://repub.eur.nl/res/pub/23544/ 2008-11-14T00:00:00Z We build a micro-simulation model able to simulate over a 15 years’ period the impact of AIDS on the distribution of income in Côte d’Ivoire. We focus on the labour supply effects of AIDS-induced mortality. We find that although the size of the economy in terms of total household income is reduced by about 6% after 15 years, average household income per capita, household income inequality and poverty remain almost unchanged. In contrast to an often heard argument, the population dependency ratio is not much modified by the AIDS epidemic. These conclusions do not seem to depend on the degree of heterogeneity and clustering of HIV/AIDS infections over the population. http://repub.eur.nl/res/pub/21683/ 2008-10-01T00:00:00Z http://repub.eur.nl/res/pub/18745/ 2007-11-01T00:00:00Z There is a well-known debate about the respective roles of geography versus institutions in explaining the long-term development of countries. These debates have usually been based on cross-country regressions where questions about parameter heterogeneity, unobserved heterogeneity, and endogeneity cannot easily be controlled for. The innovation of Acemoglu, Johnson and Robinson (2001) was to address this last point by using settler mortality as an instrument for endogenous institutions and found that this supported their line of reasoning. We believe there is value-added to consider this debate at the micro level within a country as particularly questions of parameter heterogeneity and unobserved heterogeneity are likely to be smaller than between countries. Hence, we examine the determinants of economic development across villages on the Indonesian Island of Sulawesi and find technology adoption to play a crucial role. We show that geography-induced migration together with population size foster through their effect on institutions technology adoption. http://repub.eur.nl/res/pub/34775/ 2007-01-01T00:00:00Z Previous poverty assessments of Burkina Faso neglected some important methodological issues. They were therefore misleading and led to the so-called 'Burkinabè Growth-Poverty Parado', i.e., increasing poverty despite sustained macro-economic growth and constant inequality. We estimate that poverty significantly decreased between 1994 and 2003, i.e., growth was in contrast to what previous poverty estimates suggested 'pro-poor'. However, we also demonstrate that between 1994 and 1998, poverty indeed increased despite a good macro-economic performance. This was caused by a severe drought and the devaluation of the CFA Franc, which led to a profound deterioration of the purchasing power of the poor, an issue, which was also overseen by previous studies. http://repub.eur.nl/res/pub/34787/ 2006-01-01T00:00:00Z Abstract One of the most frequent critiques of the HDI is that is does not take into account inequality within countries in its three dimensions. We suggest a relatively easy and intuitive approach which allows to compute the three components and the overall HDI for quintiles of the income distribution. This allows to compare the level in human development of the poor with the level of the non-poor within countries, but also across countries. An empirical illustration for a sample of 13 low and middle income countries and 2 industrialized countries shows that inequality in human development within countries is indeed high. The results also show that the level of inequality is only weakly correlated with the level of human development itself. http://repub.eur.nl/res/pub/34784/ 2001-01-01T00:00:00Z ABSTRACT: This article investigates the evolution of urban poverty in its various dimensions in Côte d'Ivoire since the 1980s. The robustness of the results is checked using dominance criteria. An econometric analysis of poverty complements the analysis. The study shows that the dynamic of poverty in terms of existence conditions can significantly differ from that of monetary poverty. As was the case in the 1980s, monetary poverty increased strongly in the 1990s in spite of a return to sustained growth following the devaluatio n of the CFA Franc. Poverty in terms of existence conditions rose less before the adjustment and even decreased afterwards.