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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Saving and Income Smoothing in Côte d'Ivoire
Author:Deaton, Angus S.ISNI
Year:1992
Periodical:Journal of African Economies
Volume:1
Issue:1
Period:March
Pages:1-24
Language:English
Geographic term:Ivory Coast - Côte d'Ivoire
Subjects:savings
household income
rural households
Economics and Trade
External link:https://jae.oxfordjournals.org/content/1/1/1.full.pdf
Abstract:This paper is concerned with the extent to which farmers and other households in Côte d'Ivoire save and dissave in order to make their consumption smoother than their incomes. The author tests a strict form of intertemporal smoothing, that consumption follows the permanent income hypothesis, by which consumption is equal to the annuity value of the sum of assets and the present discounted value of current and expected future labour income. Data are derived from the Côte d'Ivoire Living Standards Survey which was carried out in 1985, 1986, and 1987. The restrictions implied by the permanent income theory are not supported by the data. However, the author consistently found that saving predicts falls in income in the cross-section data, so that farmers who are saving in one year are those who are most likely to have a fall in income in the next. Although the interpretation of the findings is complicated by econometric and data problems, they provide further support for the notion that farmers plan ahead, even if they do not do so according to the strict permanent income calculus for consumption. Bibliogr., sum.
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