John Strauss.  1988.  "The Effects of Household and Community Characteristics on the Nutrition of Preschool Children: Evidence from Rural Côte d'Ivoire."  Living Standards Measurement Study, Working Paper No. 40, World Bank, Washington, D.C.

Abstract

This paper estimates reduced form equations, derived from an economic model of household production, to analyze the impact of household- and community-level variables on child nutrition in rural Côte d'Ivoire. Of particular concern are the contributions made by parental education, household wealth, and community characteristics - some of which are manipulable by government policy. Their impacts on child height and weight-for-height are estimated using a random effects approach (most households have more than one child in the sample) in order to account for common household-level unobserved variables.

Estimates for variables which vary within households are also obtained using household dummy variables (fixed effects) to purge possible correlation between unobserved household characteristics and community variables. The results show that both a mother's and a father's education have positive effects on weight-for-height, and that the mother's education has positive effects (though not precisely estimated) on height. The impact of community characteristics is strong. Of these, local wage rates, the health environment and the quality of health infrastructure seem to matter most. Unobserved household-level factors are shown to be quite important, which suggests the need to account for them in an explicit way. In addition there seem to be strong effects of intrahousehold distribution, particularly for children of household heads and their senior wives.

Angus Deaton.  1987.  "The Allocation of Goods within the Household: Adults, Children, and Gender."  Living Standards Measurement Study, Working Paper No. 39, World Bank, Washington, D.C.

Abstract

There has recently been considerable discussion on the role of women in economic development; among the issues is whether or not there is discrimination within the household, so that women receive less than men and girls less than boys. This paper presents an empirical procedure that uses household survey data to cast light on the allocation within the household. Allocation between children of different genders is studied by estimating the effects of additional children on household expenditures on various adult goods. Since children do not consume adult goods, additional children should reduce household expenditures on such goods as resources are diverted towards the goods required by children. The size of this effect as between boys and girls tells us whether households typically allocate more to boys than to girls. Using the data from the 1985 Living Standards Survey of the Côte d'Ivoire, it is found that additional children do indeed reduce the demand for adult goods, but that the effects are identical for boys and girls. Even so, the allocation of the adult goods themselves is heavily biased towards adult males. Old men do rather better than do adult women, and old women do worst of all. These results are shown to be robust to alternative empirical procedures as well as to disaggregation of the Côte d'Ivoire by region. Analysis of the demand for food shows that there is little evidence of and sex-bias in the allocation of food.

Morton Stelcner, Ana-Maria Arriagada, and Peter Moock.  1987.  "Wage Determinants and School Attainment among Men in Peru."  Living Standards Measurement Study, Working Paper No. 38, World Bank, Washington, D.C.

Abstract

This paper is the first of a series that assesses the impact of education on labor market outcomes in Peru using data from the Peruvian Living Standards Survey that was conducted between June 1985 and July 1986. The present study concentrates on factors that affect wages and school attainment of male wage and salary earners. Particular attention is given to assessing the effects of formal schooling and parental education on wages, and to the effects of primary school quality and parental education on school attainment.

The analysis (1) presents estimates of rates of return to schooling, (2) assesses the effects of parental education on wages and school attainment, and (3) examines regional differences in wage structures. We also explore the impact of non-market forces on pay structures by considering sector of employment (public vs. private) and the effects of firm size and unionization.

The main findings are as follows. Formal schooling plays an important role in explaining wage variations, and the pattern of rates of return reflects that found in most developing countries. The estimated magnitudes are similar to those found in other Latin American countries: 10% for (a year of) primary schooling, 6% for secondary schooling, and 8% for post-secondary schooling.

The analysis also suggests that there are differences in wage structures among metropolitan Lima, other urban areas, and rural areas. The impact of post-secondary schooling and vocational training are strong in Lima and rural areas, but not in other urban areas. We also find that, when parental schooling effects are excluded, having attended a public school has a significant negative impact on wages in Lima and rural areas only.

As regards the effects of parental education on wages, the results suggest that these are not as strong as may have been expected in a society that is often characterized as "socially stratified", and the effects are largely confined to other urban areas, that is, the point estimates of returns to schooling are reduced. In Lima parental schooling mitigates the negative effects of public education, but they remain strong in rural areas.

With respect to school attainment, we find that, although parental education does have a positive and significant impact, the effects diminish as cohorts get younger and are reduced when primary school quality indicators are included among the regressors, especially in rural areas. In general, we find that the primary school quality variables contribute significantly to educational attainment and their effects are stronger as the degree of urbanization decreases.

Paul Gertler, Luis Locay, Warren Sanderson, Avi Dor, and Jacques van der Gaag.  1988.  " Health Care Financing and the Demand for Medical Care."  Living Standards Measurement Study, Working Paper No. 37, World Bank, Washington, D.C.

Abstract

This LSMS working paper includes two reports that are part of a larger study on "Health Care Demand and Resource Mobilization".¹ This study addresses the issue of how various financing systems for medical care influence its utilization. Emphasis is on the impact of introducing (or raising) user fees, in terms of distributional effects, welfare consequences and revenue potential.

The first paper develops a discrete choice model that allows for the quantification of the effects of price and non-price variables on a person's decision of whether or not to obtain medical care, and if so, from which provider. The empirical work is based on recent data from a Peruvian health survey. The second paper estimates a variant of this model, using data from the 1985 Ivoirian Living Standards Survey.

The major message of both papers is that in the absence of user fees (or at low fee levels) private costs (here represented by travel time to the nearest provider) take over the rationing role of the conventional price mechanism. The first paper shows how the quantification of this effect can be used to simulate the distributional and welfare consequences of changing the fee structure.

None of the results in these papers should be judged as final, if only because both papers focus on provider choice rather than on total medical consumption. However, the main empirical results appear to be robust, and the effect of non-price rationing is found to be much stronger than previously reported in the literature.

¹ Each report is self-contained which results in a certain amount of overlap in the exposition.

John L. Newman.  1988.  "Labor Market Activity in Côte d'Ivoire and Peru."  Living Standards Measurement Study, Working Paper No. 36, World Bank, Washington, D.C.

Abstract

This paper presents information on labor market activity from household surveys undertaken in Côte d'Ivoire and Peru by the Living Standards Unit of the World Bank and the statistics departments of the respective countries. In addition to providing basic information on labor force participation, hours of work, type of employment, unemployment, participation in markets for second jobs, and reasons for not searching for work, the paper directs attention to symptoms of poor performance in the operation of labor markets, and identifies questions that should be considered in greater detail in subsequent work.

Nationwide unemployment rates are low in both countries, 2.94 percent in Côte d'Ivoire and 2.1 percent in Peru. Open unemployment in rural areas is virtually zero. The surveys reveal a striking difference in the search behavior in the largest cities in each country. In Abidjan, the largest city in Côte d'Ivoire, those searching for work are typically unemployed, while in Lima those searching for work have some type of job and are searching for additional and/or replacement work. As a result, the higher unemployment rates in Abidjan (20 percent) compared with Lima (5.1 percent) overstate differences in the extent of job search that takes place.

Avi Dor and Jacques van der Gaag.  1988.  "The Demand for Medical Care in Developing Countries: Quantity Rationing in Rural Côte d'Ivoire."  Living Standards Measurement Study, Working Paper No. 35, World Bank, Washington, D.C.

Abstract

Several authors have pointed out the implications of financing medical care from general public funds. Among these are Akin (1986), Birdsall (1986), Jimenez (1986) and de Ferranti (1985). The most authoritative treatment of this issue is given in "Financing Health Services in Developing Countries: An Agenda for Reform, (World Bank, 1987). A common theme in the discussion is that user fees can improve efficiency and the prospects for cost recovery, while maintaining current levels of equity. In-order to evaluate this argument, it is necessary to assess the responsiveness of consumers to changes in the price of medical care. Little evidence from developing countries exists to date.

In this paper we attempt to fill the gap by analyzing the demand for health care in the rural Côte d'Ivoire where user fees are zero, but private access costs may be substantial. Using a mixed discrete choice/continuous demand analytical framework, we show that the absence of user fees per se does not guarantee equal access to all consumers. Private costs, represented by travel time, result in non-price rationing similar to the conventional money price mechanism. Our results strongly suggest that if revenues obtained from user fees are used to improve the regional distribution of services, the resulting system may actually improve equity over the long-run.

Martha Ainsworth and Jacques van der Gaag. 1988.  "Guidelines for Adapting the LSMS Living Standards Questionnaires to Local Conditions." Living Standards Measurement Study, Working Paper No. 34, World Bank, Washington, D.C.

The purpose of these guidelines is to provide information for adapting the Living Standards Measurement Study (LSMS) questionnaires to local conditions. LSMS has developed three questionnaires for living standards analysis: a household questionnaire, a community questionnaire and a price questionnaire. These questionnaires have been used successfully in national surveys in Côte d'Ivoire and Peru. The Côte d'Ivoire Living Standards Survey (CILSS) began in 1985, as a collaborative effort of the Côte d'Ivoire Department of Statistics and the World Bank. This is a permanent survey that interviews a "rolling panel" of nationally-representative households. In the first year 1600 households were interviewed. In each subsequent year 800 households are interviewed a second time and 800 are replaced with new households. The CILSS is beginning its third year of operation. The Peru Living Standards Survey was a one-time survey of 4,800 households undertaken in 1985-1986. It was jointly sponsored by the National Statistics Institute (INE) of Peru and the World Bank.

In preparing these guidelines, we tried to benefit as much as possible from experience to date in working with the Ivoirian and Peruvian data. Where useful and feasible, we use preliminary results to illustrate the policy relevance of the data collected with the living standards questionnaires.

Jacques van der Gaag and Wim Vijverberg.  1988.  "Wage Determinants in Côte d'Ivoire."  Living Standards Measurement Study, Working Paper No. 33, World Bank, Washington, D.C.

Abstract

The following two papers present an analysis of wage determinants in Côte d'Ivoire, using the standard Mincerian framework. The data used stem from the Côte d'Ivoire Living Standards Survey, conducted in 1985. This survey collected information on 1,600 households. Our sample consists of the 514 individuals in these households who reported a wage earning job during the seven days prior to the interview. The first paper uses the total sample and addresses the issues of credentialism and returns to years of schooling, by type of school. In the regressions that do not include variables to represent school diplomas, we find an unusual result: rates of return to one year of additional schooling increase with the level of schooling: almost 12 percent for elementary education, but 20 percent for high school and 22 per cent for university education. This pattern suggests a severe shortage of Ivoirians with higher education. The results by age-cohort (presented in Appendix 2) seem to underscore this point: younger workers receive higher returns than their older counterparts. Apparently, the development of the Ivoirian economy, and the corresponding increase in the demand for better educated workers, has outpaced the supply of such workers.

When diplomas acquired are added to the equation, the high returns to an additional year of schooling decrease substantially while the diplomas show a large impact on the wage rates (40-50 percent). This suggest the existence of a certain amount of credentialism in the Ivoirian wage sector. However, a pure credentialistic specification of the wage equation is rejected by the data.

Appendix 2 to the first paper reports results by cohort, sex, nationality and region.

The second paper reports the results for public and private workers separately. However, rather than relying on standard OLS results for each group, we develop a model that recognizes the endogeneity of the sector choice. We find that the OLS results are likely to be seriously biased. The overall dominance of public over private wages (indicated by the OLS results) vanishes once the selection process is taken into account. Public wages are still somewhat higher for better educated workers, but the private sector offers higher wages than the government to workers with little education. We finally show the importance of school diplomas as determinants for obtaining a job in the public sector.

Ruben M. Suarez-Berenguela.  1987.  "Informal Sector, Labor Markets and Returns to Education in Peru."  Living Standards Measurement Study, Working Paper No. 32, World Bank, Washington, D.C.

Abstract

This paper presents a review of the literature about the labor market, the informal sector of the labor market and returns to education in Peru. After summarizing some conceptual and methodological issues related to the use of the formal-informal analytical categories, I present estimates about the importance of informal sector activities and characteristics of workers in informal economic units (IEUs). I point out that both the magnitude of the informal sector and characteristics of informal workers are highly sensitive to the conceptual and operational criteria chosen to differentiate between formal and informal activities. I argue that a clear- cut approach to the underlying formal-informal issues could be obtained by identifying homogenous socioeconomic groups for which classificational criteria are directly linked to the available policy instruments. To discuss formal- informal labor markets issues I present data on the composition and employment levels of the Peruvian labor force, labor market structures resulting from alternative segmenting criteria and estimates of the effects of labor legislation on the demand for labor and actual levels of output and employment.

Econometric estimates, found in the literature, of the effects of labor laws on the level of output and employment are inconclusive. No serious work has been done in testing market segmentation hypothesis or the role of labor market regulations in affecting the functioning of the labor market. Further empirical work in these areas is needed. Finally, after presenting a summary of the educational composition of the Peruvian labor force, I report findings about the determinants of participation rates and estimates about rates of return to human capital. I also point out some of the issues and areas of research that can be pursued with data from the World Bank-INE Household survey recently completed in Peru.

Ruben M. Suarez-Berenguela.  1987.  "Financing the Health Sector in Peru."  Living Standards Measurement Study, Working Paper No. 31, World Bank, Washington, D.C.

Abstract

This paper reviews the health status of the Peruvians and the financing and spending patterns of Peruvian health institutions. Between 1975-85 declining income per capita of the population has been accompanied by unsuccessful attempts to reduce total government expenditures. However, government expenditures in social programs declined from one third of the budget in 1973-75 to less than one fifth in 1981. Expenditures in health programs as a proportion of the government budget declined from 6.4 percent in 1970 to around 4.5 percent in 1980-85 (to 0.6 percent of the CDP). This amounts to approximately 5.0 U.S. dollars per capita. Central government revenues the main source of financing of public health institutions. Expenditure by corporate health institutions and private institutions and individuals account for approximately 90 percent of total resources spent on health related goods and services. Corporate institutions spent around 100 U.S. dollar per "affiliated" member, private individuals spent between 10 and 20 U.S. dollars per capita. These findings call for the need to explore the actual scope of health government programs and the role that nongovernment institutions may play in implementing health programs.

Child and infant mortality and the high incidence of environmental related diseases appear as the most critical health problems in Peru. Observed mortality and morbidity patterns and the tendency of Peruvian health institutions to concentrate on curative rather than preventive services, suggest that there might be a misallocation of resources. Analysis of health related indicators also show a high degree of inequality in the spatial distribution of health resources and sanitation services.

Angus Deaton.  1987.  "Quality, Quantity and Spatial Variation of Price: Estimating Price Elasticities from Cross-Sectional Data."  Living Standards Measurement Study, Working Paper No. 30, World Bank, Washington, D.C.

Abstract

The paper is concerned with the development and implementation of a methodology for estimating own and cross-price elasticities of demand using cross-section household survey data. Especially in developing countries, it is difficult to obtain good estimates of price elasticities using standard time-series analysis. But many countries collect household survey data in which respondents are asked about both expenditures and physical amounts of purchases, so that unit values can be derived. These unit values, which depend on actual market prices, suggest that there is substantial spatial variation in prices in many developing countries, a finding that makes good sense in the presence of high transport costs. However, it is not possible to use unit values as a substitute for true market prices in the analysis of demand patterns. Consumers choose the quality of their purchases, and unit values reflect this choice. Moreover, quality choice may itself reflect the influence of prices as consumers respond to price changes by altering both quantity and quality. Measured unit values are also contaminated by errors of measurement in expenditures and in quantities and are likely to be spuriously negatively correlated with measured quantities. In the technique developed here, market prices are treated as unobservable variables that affect quantities purchased, and that determine observed unit values with both measurement error and quality effects. Since the primary sampling units in household surveys are typically clusters of households that live together in the same village and are surveyed at the same time, it is plausible that there is no genuine variation in market prices within each cluster. A within-cluster estimator can therefore treat market prices as unobservable fixed effects and estimate Engel curves and quality effects, as well as the measurement error variances and covariances. The between cluster covariance of corrected unit values and quantities can then be used to estimate the price elasticities, once due allowance is made for the measurement error and for the effects of price variation on quality. Data from a 1979 household survey from the Côte d'Ivoire are used to estimate price elasticities for beef, meat, fish, cereals, and starches. The results suggest that the measurement error effects are large and are variable between goods and regions, so that the elasticities estimated by treating the unit values as if they were prices give little guidance to the true magnitudes. By contrast, the quality effects do not seem to very important, at least in these data.

Paul Glewwe.  1988.  "The Distribution of Welfare in Côte d'Ivoire in 1985."  Living Standards Measurement Study, Working Paper No. 29, World Bank, Washington, D.C.

Abstract

This paper examines the distribution of welfare in Côte d'Ivoire (Ivory Coast) in 1985 as measured by per capita consumption expenditures. The data employed are from the 1985 C8te d'Ivoire Living Standards Survey. While it is meant to be primarily descriptive in nature, possible explanations of particular patterns in the distribution of welfare are offered at several points. The major findings are: 1. The urban population in Côte d'Ivoire is substantially better off than the rural population, and the poor in Côte d'Ivoire are overwhelmingly found in agricultural pursuits in rural areas. 2. There is a strong association between education and welfare, which highlights the importance of educational policies, particularly those affecting the school attendance of children. 3. Household composition, more specifically the proportion of household members who are children or who are employed, does not explain why some households are poor - poor households have a larger proportion of working members and a lower proportion of children than do other households.

Angus Deaton and Ann Case.  1987.  "Analysis of Household Expenditures."  Living Standards Measurement Study, Working Paper No. 28, World Bank, Washington, D.C.

Abstract

In any society, one of the ultimate objectives of the economic system is to deliver goods and services to its members. The success of an economy can be measured by its ability to provide for its people, to feed them, to clothe and shelter them, and to offer them access to good health, to education and to a wide range of consumer goods. The household expenditure survey is the tool through which material welfare is measured. Its results inform about levels of living, about how these levels change over time, and about how levels of living vary among individuals and groups in the economy. Beyond this point, the wealth of data from such surveys provides an information base that, in the short run, is an essential prerequisite for the evaluation of actual or proposed policies and, in the long run, by enhancing our understanding of how the economy functions, allows the evolution of better policies for progress and development.

Using household expenditure surveys, we can explore a wide range of issues that are both of substantive interest in their own right, and that help improve our understanding of the functioning of the economy. In this paper, we devote space to three such analytical issues; the estimation of Engel curves, that is, the relationship between demand patterns, household budgets, and their demographic composition; the calculation of measures of the costs of maintaining children; and the calculation of price indices.

Christiaan Grootaert.  1986.  "The Role of Employment and Earnings in Analyzing Levels of Living: A General Methodology with Applications to Malaysia and Thailand."  Living Standards Measurement Study, Working Paper No. 27, World Bank, Washington, D.C.

Abstract

This paper is intended as a manual for the use of employment and earnings data (as collected in the Living Standards Surveys) in the context of policy analysis of levels of living. The target audience is the staff of statistical offices and user agencies in developing countries who have been charged with providing a first analysis of newly collected data. The analysis proposed in the manual takes into account the limitations of analytic and computing capabilities that typically exist in many countries. In the first part of the manual a set of tables and graphs are suggested, fewer in number than those found in a typical labor force survey report, but which are deemed to bring out better the main facts about employment and earnings, and are directly relevant for selected policy issues.

The second part of this study follows up with multivariate analysis of labor force participation and earnings. Relevant econometric issues are explicitly discussed.

Martha Ainsworth. 1986.  "The Côte d'Ivoire Living Standards Survey Design and Implementation." Living Standards Measurement Study, Working Paper No. 26, World Bank, Washington, D.C.

The Côte d'Ivoire Living Standards Survey (CILSS) is the first survey to field test the methodology and questionnaires developed by the Living Standards Measurement Study.

The primary objectives of the survey are:

1. To provide timely cross-sectional and panel data on a permanent basis on living conditions of African households in Côte d'Ivoire.

2. To study the interrelationships between different components of living standards within the same households.

3. To develop and test methodologies for measuring living standards in developing countries.

The survey is being undertaken by the Côte d'Ivoire Department of Statistics in 1600 African households per year throughout the country in communities randomly selected to be nationally representative. Every year half of the sample is replaced, thereby yielding two observations one year apart for half of the previous year's households. Data on community characteristics, including local prices, are collected on separate village and price questionnaires. Although the World Bank will collaborate on this survey for only two years, the survey is expected to be continued on a permanent basis by the Department of Statistics. 

This paper documents the development of the Côte d'Ivoire Living Standards Survey up to December 1985, ten months after field operations began. The chapters that follow describe:

 * The sample design
 * Survey instruments
 * The organization of the survey
 * Data management
 * The first ten months of field operations 

In the last chapter some tentative conclusions are presented about the logistical and design aspects of living standards surveys, based on experience to date in Côte d'Ivoire.

Christiaan Grootaert. 1986.  "The Demand for Urban Housing in the Ivory Coast." Living Standards Measurement Study, Working Paper No. 25, World Bank, Washington, D.C.

During recent years the large African cities have known a very strong population growth. The satisfaction of housing needs has therefore become a policy priority in many countries. Yet there is virtually no empirical work on African countries to provide estimates of the basic parameters of the demand for housing. This paper contains the first systematic estimates of the income and price elasticities of the demand for urban housing in the Ivory Coast. An integrated model of the choice of tenancy status and the demand for housing is presented and estimated. Also estimated is a multinomial logit model of the choice of type of accommodation. The paper also addresses two methodological issues: (i) is there any evidence of selectivity bias in the estimation of housing demand equations, and, if so, to what extent does a correction of this bias affect estimated elasticities; and (ii) how sensitive are estimated elasticities to the functional form chosen for demand equations?

Christiaan Grootaert. 1986.  "Measuring and Analyzing Levels of Living in Developing Countries: Does it Make Sense?" Living Standards Measurement Study, Working Paper No. 24, World Bank, Washington, D.C.

This paper contains the household and community questionnaires used in the Ivory Coast Living Standards Survey. This survey is the first field operation of the Living Standards Measurement Study. The annotation to the household questionnaire describes the process by which the questionnaire was drafted, the main choices and trade-offs that underlie its content, and its main technical features. The outline and analytical purpose of each section of the questionnaire is discussed.

Orley Ashenfelter, Angus Deaton and Gary Solon.  1986.  "Collecting Panel Data in Developing Countries: Does It Make Sense?"  Living Standards Measurement Study, Working Paper No. 23, World Bank, Washington, D.C.

Abstract

This Working Paper reviews a number of aspects of the collection and use of panel data from households in developing countries. Sampling issues are discussed in Section 1. The authors conclude that there are likely to be real, if modest, benefits from incorporating some panel element into household survey data collection in developing countries. The recognition that panel data are likely to be subject to substantial errors of measurement does not invalidate this conclusion. Section 2 discusses the measurement of income dynamics, an issue that cannot be addressed without panel data. Recent research using U.S. data is reviewed to show that comparable work for developing countries would add an important dimension to discussions of poverty, inequality, and development. It is in the third area of review, that of econometric analysis, that the real benefits of panel data appear most fragile. These issues are discussed in Section 3. While it is true that panel data offer the unique ability to deal with the contamination of econometric relationships by unobservable fixed effects, the presence of measurement error can compromise the quality of the estimates to the point where it is unclear whether cross-section or panel estimators are superior. This situation is in sharp contrast to that for sampling where errors of measurement typically cannot reverse the superiority of panel over cross- section estimators.

The authors conclude by arguing that panel data should be collected in both developing and developed countries. Benefits of well-designed data collection efforts are likely to outweigh the costs. However, it is easy to overstate the likely benefits of panel data. Their existence will not solve all outstanding problems of understanding poverty and household behavior in developing countries. While they will undoubtedly bring new and important insights, they will also bring new problems of interpretation and analysis.

Christiaan Grootaert and K. F. Cheung.  1985.  "Household Expenditure Surveys: Some Methodological Issues."  Living Standards Measurement Study, Working Paper No. 22, World Bank, Washington, D.C.

Abstract

This Working Paper (which comprises two parts) is concerned with several methodological aspects of collecting information on household expenditures. Three issues are discussed in the first part (1) the impact of the length of survey participation on mean and variance of reported income and expenditures; (2) the determinants of survey participation, in particular the decision by household members to fill out expenditure diaries and (3) the additional reporting which results from household members keeping individual diaries, as opposed to one member keeping one household diary book. The second part compares the reliability of two alternative methods to obtain data on expenditures on durables and other infrequently purchased goods and services.

G. Donald Wood, Jr. and Jane A. Knight.  1985.  "The Collection of Price Data for the Measurement of Living Standards."  Living Standards Measurement Study, Working Paper No. 21, World Bank, Washington, D.C.

Abstract

This paper considers ways of collecting price data in a Living Standards Survey. Its objective is to comment on the efficacy of collecting price data through household surveys and to consider alternative methods for obtaining such information. The paper provides a general overview of problems encountered in the construction of price indices over time and among different regions at a point in time and offers practical solutions to them.