Much of the literature on consumption smoothing and on risk sharing has focused on the ability of the household as a unit to protect its consumption. Little is known about the ability of individual members of the household to keep consumption smooth over time or relative to other members of the household. We use data on adult nutrition in Ethiopia to investigate whether individuals are able to smooth their consumption over time and within the household. We find that poorer households are not able to do so. Furthermore, poor southern households do not engage in complete risk sharing; women in these households bear the brunt of adverse shocks. This result implies that the collective model of household organization, which imposes Pareto efficiency on allocations, is rejected for these households. Finally, we obtain estimates of the relative Pareto weights in household allocation. We find that a wife’s relative position is better if customary laws on settlements at divorce are favorable or if she comes from a relatively wealthy background and that poor southern women have lower Pareto weights in allocation.

This study explores to what extent migration has contributed to improved living standards of individuals in Tanzania. Using a thirteen-year panel survey, we find that migration between 1991 and 2004 added 36 percentage points to consumption growth. Although moving out of agriculture resulted in much higher growth than staying in agriculture, growth was always greater in any sector if the individual physically moved. As to why more people do not move given the high returns to geographical mobility, analysis finds evidence consistent with models in which exit barriers set by home communities prevent the migration of some categories of people.

Abstract Aspirations may condition the future-oriented choices of individuals and thus may play a role in the persistence of poverty or the effort to break out of it. We run a randomized controlled trial in remote, rural Ethiopia to explore this and evaluate an intervention that aims to change how poor people perceive their future opportunities, alter their aspirations, and through that, modify their investment decisions. A treatment group was shown video documentaries featuring individuals from similar communities who escaped poverty through their own efforts and who serve as relatable role models. Five years after the screening took place, the treated households had increased future-oriented investments in agriculture, children’s education, and assets. The results can be explained by an increase in aspirations in terms of lifetime goals. Overall, this research uniquely provides evidence that a light-touch behavioural intervention can have persistent economic impacts on a poor population.