Individual Household Level Research Articles

Household stockholding in Europe: where do we stand and where do we go?

We discuss the current state of stockownership among households in major European countries, drawing parallels and contrasts with the US experience. Our analysis of detailed microeconomic data documents increasing stock market participation and persistent differences across countries in our sample: many more US, UK and Swedish households participate in the stock market than is the case in the Netherlands and, especially, in France, Germany, and Italy. At the individual household level, the data indicate that stock market participation correlates robustly with wealth and education, which have only small effects, however, on the asset share invested in stocks by households who do participate. These empirical results point to the relevance of participation costs, and we find that indicators of such costs are consistent with the observed pattern of participation across countries. Over time, higher participation was brought about by lower participation costs. We discuss the possible impact of market entry by households with different characteristics, and outline types of policies that could mitigate any undesirable stock market effects of cheaper and broader participation. — Luigi Guiso, Michael Haliassos and Tullio Jappelli

Car Ownership in Great Britain: Panel Data Analysis

The analysis of the factors determining changes in travel behavior on the individual (or individual household) level requires information on the behavior of individuals over time. Such “transport” panel surveys are rarely available, particularly for a sufficiently long time period to examine such changes more than cursorily. For the United Kingdom, none exists for other than limited regions. However, the ongoing British Household Panel Survey (BHPS), begun in 1991, provides some information related to transport—specifically, household car ownership—as well as information on the economic and sociodemographic characteristics of the households surveyed. BHPS data for 1993 to 1966 are used to analyze car ownership and the factors determining car ownership decisions on an individual household level. As far as is known, this has not yet been done in any systematic manner. The relationship between car ownership, income, and sociodemographic factors such as household composition, residential location, and population density (persons per hectare in the local authority district in which the household resides) is investigated. Both descriptive statistical measures and formal modeling approaches, based on dynamic discrete choice models and panel data econometric techniques, are used.

The “Shopping Basket”: A Model for Multicategory Purchase Incidence Decisions

Consumers make multicategory decisions in a variety of contexts such as choice of multiple categories during a shopping trip or mail-order purchasing. The choice of one category may affect the selection of another category due to the complementary nature (e.g., cake mix and cake frosting) of the two categories. Alternatively, two categories may co-occur in a shopping basket not because they are complementary but because of similar purchase cycles (e.g., beer and diapers) or because of a host of other unobserved factors. While complementarity gives managers some control over consumers' buying behavior (e.g., a change in the price of cake mix could change the purchase probability of cake frosting), co-occurrence or co-incidence is less controllable. Other factors that may affect multi-category choice may be (unobserved) household preferences or (observed) household demographics. We also argue that not accounting for these three factors simultaneously could lead to erroneous inferences. We then develop a conceptual framework that incorporates complementarity, co-incidence and heterogeneity (both observed and unobserved) as the factors that could lead to multi-category choice. We then translate this framework into a model of multi-category choice. Our model is based on random utility theory and allows for simultaneous, interdependent choice of many items. This model, the multi variate probit model, is implemented in a Hierarchical Bayes framework. The hierarchy consists of three levels. The first level captures the choice of items for the shopping basket during a shopping trip. The second level captures differences across households and the third level specifies the priors for the unknown parameters. We generalize some recent advances in Markov chain Monte Carlo methods in order to estimate the model. Specifically, we use a substitution sampler which incorporates techniques such as the Metropolis Hit-and-Run algorithm and the Gibbs Sampler. The model is estimated on four categories (cake mix, cake frosting, fabric detergent and fabric softener) using multicategory panel data. The results disentangle the complementarity and co-incidence effects. The complementarity results show that pricing and promotional changes in one category affect purchase incidence in related product categories. In general, the cross-price and cross-promotion effects are smaller than the own-price and own-promotions effects. The cross-effects are also asymmetric across pairs of categories, i.e., related category pairs may be characterized as having a “primary” and a “secondary” category. Thus these results provide a more complete description of the effects of promotional changes by examining them both within and across categories. The co-incidence results show the extent of the relationship between categories that arises from uncontrollable and unobserved factors. These results are useful since they provide insights into a general structure of dependence relationships across categories. The heterogeneity results show that observed demographic factors such as family size influence the intrinsic category preference of households. Larger family sizes also tend to make households more price sensitive for both the primary and secondary categories. We find that price sensitivities across categories are not highly correlated at the household level. We also find some evidence that intrinsic preferences for cake mix and cake frosting are more closely related than preferences for fabric detergent and fabric softener. We compare our model with a series of null models using both estimation and holdout samples. We show that both complementarity and co-incidence play a significant role in predicting multicategory choice. We also show how many single-category models used in conjunction may not be good predictors of joint choice. Our results are likely to be of interest to retailers and manufacturers trying to optimize pricing and promotion strategies across many categories as well as in designing micromarketing strategies. We illustrate some of these benefits by carrying out an analysis which shows that the “true” impact of complementarity and co-incidence on profitability is significant in a retail setting. Our model can also be applied to other domains. The combination of item interdependence and individual household level estimates may be of particular interest to database marketers in building customized “cross-selling” strategies in the direct mail and financial service industries.

An economic analysis of blast fishing on Indonesian coral reefs

Characteristics, impacts and economic costs and benefits of blast fishing have been little investigated and they were therefore studied in Indonesia, at the scale of individual fishing households and of Indonesian society as a whole. Although illegal and highly destructive to coral reefs, blast fishing provides income and fish to a vast number of coastal fishers who claim that they have no alternative to make a living. Crew members in small-, medium- and large-scale blast fishing operations earned net incomes per month of US$55, 146 and 197 respectively. Boat owners in the same types of operations earned US$55, 393 and 1100 respectively. These incomes were comparable to the highest incomes in the conventional coastal fisheries. At the individual household level, the differences between the three types of operations show clear incentives for scale enlargement. The cost-benefit balance at the society level was calculated with an economic model. This analysis showed a net loss after 20 years of blast fishing of US$306 800 per km2 of coral reef where there is a high potential value of tourism and coastal protection, and US$33 900 per km2 of coral reef where there is a low potential value. The main quantifiable costs are through loss of the coastal protection function, foregone benefits of tourism, and foregone benefits of non-destructive fisheries. The economic costs to society are four times higher than the total net private benefits from blast fishing in areas with high potential value of tourism and coastal protection. This analysis of characteristics, impact and economics of blast fishing should help to raise the political will to ban blast fishing from Indonesian waters. Moreover, it allows for an evaluation of possible management solutions, taking into account their costs and the socio-economic framework that caused coastal fishers to start using explosives.

Population and Poverty in Classical Theory: Testing a Structural Model for India

There has for many years been debate over the relationships between population growth rates and poverty. India is a country which provides a good testing ground for hypotheses about this relationship because since Independence a relatively high proportion of the population have lived in poverty; and there also exist reasonable data. This paper develops a simple structural model to investigate the relationship between population growth and poverty in particular, testing a series of hypotheses developed from the work of Marx and Malthus. The data are analysed at state level, and attention is drawn to the problems that this might cause as behaviour is typically determined at the individual household level. The results show that agricultural productivity and the process of landlessness are better predictors of poverty at a state level than the population growth rate. It is argued that the results fit better with the views of Marx than those of Malthus.

Center and Periphery in the Social Organization of Contemporary Nahuas of Mexico

There has been a tendency among ethnographers working in Indian villages in Mesoamerica to ignore intermediary social units that lie between domestic group and wider universe of community, regional, and national-level social structures (Nutini 1976:3).(1) Ethnographers who have investigated social organization in Mesoamerican have tended to focus on local-level kinship systems. One reason for this emphasis on micro-analyses is that villagers themselves often place domestic group at center of their psychological and social worlds. Another reason is that social structures beyond immediate kinship system often appear ephemeral and are difficult for ethnographers to study. This article offers an explanation of why intermediary social structures are such a challenge to investigate, and suggests an analytical approach that will reveal significance of these entities in lives of indigenous Mesoamericans. The call to take a more macroscopic view of social organization in Mesoamerica is not recent. Forty years ago, Eric Wolf suggested that analysts view Indian villages as the local termini of a web of group relations which extend through intermediary levels from level of community to that of nation (Wolf 1956:1065). He advocated regional studies in place of community studies because key relations originating outside of local group may be wholly tangential to each other in an actual community (Wolf 1956:1065). Anthropologists should attend to the relationships between different groups operating at different levels of society, rather than on any one of its isolated segments (Wolf 1956:1074). Perhaps relative lack of ethnographic research on social units beyond domestic group has contributed to an element of confusion. On one hand, Wolf (1960:5) states, No significant web of social relationships intervenes between level of individual household and organizational level of community. More recently, however, he has lamented that scholars disregard entities and kinship structures intermediate between household and community . . . as well as connective networks among peoples in communities (Wolf 1986:327). Do such entities and structures exist? If so, how do they operate in Mesoamerican communities? In characterizing importance of social units that lie beyond domestic group, anthropologists often fall back on mechanical metaphors to clarify this often complex tangle of shifting social structures and processes. Hunt and Nash (1967), for example, describe two dimensions of local groups and territorial units in Mesoamerica. First, they see them as demographic, administrative, and political structures imposed on Indian by Spaniards and later by independent nation-states. Then they see local groups and territorial units as a means of ordering social interaction and establishing community identity (Hunt and Nash 1967:253). After comparing a number of intermediary social units, they conclude that it is evident that Middle America has a low regional integration (Hunt and Nash 1967:279). Truex (1996) and I contend that intermediary social units do exist in Middle America, but not as conveniently isolated and identifiable formal structures. Rather, they exist as a shifting, ephemeral social framework around which factions are organized. Problems of clarifying place of intermediary social units in Mesoamerican social systems are legion. Mulhare (1996) provides an admirable summary of many of theoretical and empirical difficulties that impede scientific progress in this area. She points to variety of emic labels people use to identify social arrangements beyond domestic group and to diverse criteria that are used to define these units, including kinship, territory, and religious practice. Adding to confusion, terms that refer to intermediary social units such as barrio, calpul, and paraje have been applied throughout Mesoamerica to such a variety of social arrangements that many have lost all analytic value. …

Livestock in africa: The economics of ownership and production, and the potential for improvement

Livestock are important assets in Africa, helping improve the nutritional status of their owners, and contributing to economic growth. Can these roles continue and can livestock production systems be further developed so that they will be sustainable? A key feature of livestock in Africa is that they fulfill multiple roles, ranging from draught power, to providing manure, milk, and meat. Constraints to increasing productivity include both physical and institutional. In the former category, constraints to adopting draught power include insufficient numbers at the individual household level. Lack of adequate pasture is probably the most important constraint. Diseases are also notable constraints to improving productivity, particularly those categorized as Group I (highly contagious — e.g., rinderpest) or Group II (vector-borne parasitic and viral—e.g., trypanosomiasis). Institutional constraints include lack of research and market distortions. To improve productivity, at the macroeconomic level, governments must continue or start policies aimed at liberalizing markets and revaluing exchange rates. Also, research institutions need an increase in funding for periods of ten or more years. Research and other livestock institutions may be able to leverage limited resources by forming more collaborative relationships at the regional level. Research priorities include breeding on specific aspects, such as increased milk production. However, it must be realized that breeding programs have an inherent problem in disseminating improved breeds in a rapid and equitable manner. Quality of pasture may be improved by further research on more accurately calculating stocking rates and on developing mechanisms to control numbers on pastures (e.g., community controlled grazing schemes). Other research priorities include new technologies to improve animal health, funding of micro-enterprises to add value to livestock products, and market information systems for small-scale farmers. Schemes to increase livestock production in Africa will only occur if innovations closely match the local sets of circumstances. Given the multiple roles of livestock, research into innovations that local communities will readily adopt must take a systems approach.

Choice of Contracts in Turkish Agriculture

Sharecropping and fixed rent tenancy have coexisted under extremely diverse settings for centuries, from labor-abundant South and East Asia to land-abundant West Africa and the Americas. This fact has intrigued generations of economists since Adam Smith. Marshall's lucid exposition of the productive inefficiencies of sharecropping in the Principles paved the way for a major effort to reconcile neoclassical theory with the reality of coexistence.1 Another substantial segment of the literature condemned sharecropping as an exploitative mechanism in semifeudal societies and predicted its downfall.2 More recent theoretical treatments, however, hail the share contract as a simple yet ingenious arrangement that guarantees the second-best outcome in environments characterized by risk, input market imperfections, and moral hazard.3 The intuition underlying this argument is widely accepted but has yet to yield a general explanation of the real-world coexistence phenomenon. Nor should we expect such an explanation. Each country and historical episode has its unique climatic, technological, and institutional characteristics and different motives for the adoption of share contracts may dominate in different settings.4 It is troublesome, in fact, that our empirical knowledge is so thin given that our theory of agricultural contracts is so rich.5 One reason, of course, is that appropriate data are costly and difficult to collectfor contractual choice is stubbornly complex and is best observed at the individual agent or household level. There has been empirical work, but much of it has examined the well-worn Marshallian theme: Is sharecropping less efficient than self-cultivation?6 Our knowledge of the conditions under which different contracts are likely to arise is limited to a handful of studies on the Indian subcontinent or the United States.' In this article I examine the determinants of contractual choice during the 1970s for samples of individual Turkish landlords and tenants. The data were drawn from a 1973 survey that was national in

A Vision of the Future? An Innovative Database Micromarketing System

The increase in the scale of retail grocery operations to the supermarkets of today has been at the expense of the detailed knowledge of local customer preferences that small retailers could possess. This article examines the features of a technological solution to this problem and describes how the Vision System, an interactive multimedia point-of-sale shopper loyalty and promotion system, is revolutionizing retail marketing in the United States. The implications of highly-targeted marketing at the individual household level, micromarketing, are examined and it is suggested that supermarkets using such systems would achieve a significant competitive advantage. It is also suggested that the widespread adoption of Vision-type systems would have a profound impact upon manufacturers and the marketing industry as a whole.

A vision of the future? An innovative database micromarketing system

The increase in the scale of retail grocery operations to the supermarkets of today has been at the expense of the detailed knowledge of local customer preferences that small retailers could possess. This article examines the features of a technological solution to this problem and describes how the Vision System, an interactive multimedia point-of-sale shopper loyalty and promotion system, is revolutionizing retail marketing in the United States. The implications of highly-targeted marketing at the individual household level, micromarketing, are examined and it is suggested that supermarkets using such systems would achieve a significant competitive advantage. It is also suggested that the widespread adoption of Vision-type systems would have a profound impact upon manufacturers and the marketing industry as a whole.

An Elimination by Aspects Model of Consumer Response to Promotion Calibrated on UPC Scanner Data

Because consumers are believed to use simplifying heuristics to screen alternatives before choosing one to purchase, the authors formulate and estimate an elimination by aspects model at the individual household level, using UPC scanner data collected from purchases of regular ground coffee. The proposed model fits and predicts the data as well as its compensatory approximation. The parameters of the proposed model are reasonably stable, unbiased, and different in interesting ways from their compensatory counterparts.

Land Tenure and Politics in the Late/Terminal Classic Rosario Valley, Chiapas, Mexico

Archaeological settlement evidence from the Late/Terminal Classic (A.D. 700-950) Rosario Valley is analyzed for what it reveals about land tenure and its relation to politics. Concerning the degrees of private versus communal versus state control over land, the distribution of settlement over different land types indicates that control over land was localized more at the community than at the individual household level. State control over land is indicated by the political capital's distorting effect on the distribution of settlement in relation to arable land within its vicinity. Finally, the distributions of residential groupings do not suggest a dispersed estate (or feudal) type of settlement pattern for elite residents, since most of these resided in relatively large and hierarchically superior sites.

Biogas development in Zimbabwe

Two main biogas prorammes have been developed in Zimbabwe, one for the development of biogas at the individual household level (40 digesters) and the other for institutional users like schools and rural community centres (10 digesters). The funding of these digesters is provided by the users themselves and the Government provides the technical advice. In the future four projects are considered: (1) a biogas promoter will work in rural areas from village to village to inform leaders and teach the people; (2) rural resettlement schemes based on dairy farming are planned to integrate biogas production; (3) commercial farmers will get technical advices to build digesters for their workers; finally (4) two industries have been identified as candidates for biomethanation projects: a food-processing industry and a brewery.

A model of individual household temperature demand and energy-related welfare changes using satiety

A model of the utility-maximizing household is developed in which data on satiety levels for indoor temperature can be used along with budget constraint parameters and actual temperature choices to estimate parameters of the utility function. Using the utility parameters, equivalent variations in income can be estimated to measure welfare effects of policy and price changes that effect home heating. All of these operations can be performed at the individual household level and for any member of a popular class of utility function forms. The required data are easy to obtain, although they typically are not collected in household surveys.

Infant mortality in Sri Lankan households: A causal model

The infant mortality rate in Sri Lanka has fallen precipitiously since World War II, to 44 per 1000 births, a rate that is similar to a number of Western Countries. Yet the aggregated country rate masks wide variations across districts, from a low 21 per 1000 in Jaffina District to a high of 100 per 1000 in Nuwara Eliya District. Such regional variations in infant mortality rates have been shown to be related to a number of social, demographic and intitutional characteristics of each area. To specify such linkages we move, in this paper, from the aggregate level of analysis to the level of individual households in order to look for social, economic and other characteristics associated with infant deaths. Data are derived from a systematic interview of 480 household heads in 12 villages of Sri Lanka, collected in 1980. The most proximate factors, public health or medical variables, that predict infant death in particular households include quality of family nutrition, supervised childbirth, immunization of children and, most significant, whether the family has a sanitary latrine. Yet these medical variables are strongly associated with educational and economic characteristics of the family which, in turn, are predictive of infant mortality. Poor families and poorly educated mothers are less likely to go to hospital for childbirth, have a latrine, etc., and more likely to have had an infant die. Underlying the variations in education and economic status are variations in ethnic group; families with poor sanitation, least education and few economic resources are most likely to be members of the minority communities, Ceylon or Indian Tamils and Muslims. Minority group membership is significantly associated with infant mortality as well. When a set of medical, educational, economic and cultural variables are examined simultaneously within a path model we show that the best causal explanation of infant death in Sri Lankan households says, “Minority group status results in poverty which prevents families from having safe sanitary facilities which causes infant death”. Infant mortality in Sri Lanka is thus not simply a medical problem to be dealt with by public health programs, nor is it solely an economic problem that can be solved with creation of jobs, but it is better seen as a problem of the structure of the whole society.