The invisible hand of rain in spending: Effect of rainfall-driven agricultural income on per capita expenditure in Ghana

Eric Akobeng

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)

Abstract

This paper uses a nationally representative household pseudo-panel dataset for Ghana, a rain-fed agriculture economy, to investigate whether there is a positive relationship between rainfall-driven agricultural income and household per capita expenditure. By using the Two Stage Least Squares Instrumental Variable (2SLS-IV) estimator, it is found that a fall in rainfall-driven agricultural income leads to a decrease in per capita expenditure. The results show that the gender and the locality of the household head matter in the response of per capita expenditures to rainfall-driven agricultural income. Female-headed and rural households are more vulnerable to rainfall-driven agricultural income changes. The expenditure disaggregation indicates that female-headed households significantly reduce per capita nonfood expenditure in times of rainfall-induced agricultural income decrease whilst the response of male-headed households focuses more on reducing per capita food and remittance expenditures.

Original languageEnglish
Pages (from-to)98-122
Number of pages25
JournalSouth African Journal of Economics
Volume85
Issue number1
DOIs
Publication statusPublished - 1 Mar 2017
Externally publishedYes

Keywords

  • Agricultural income
  • Per capita expenditure
  • Rainfall

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