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GTAP Resource #3642

"The Impact of domestic remittes on Households' Income Distribution in a context of Global Food Crisis"
by Dienesch, Elisa, Cheickh Sadibou Fall and Laetitia Leroy

This paper aims to assess how domestic urban-rural remittances can mitigate macroeconomics shocks in a developing country. As underlined by Cox (1990, 2002), Cox and Jimenez (1998) and Morduch (1995), private transfers can significantly help households to deal with exogenous risk and similar studies find evidence of an efficient risk sharing between the poorest households thanks to private cash exchanges (Deaton 1997, Townsend 1995, Jalan and Ravallion 1997).
We design a computable general equilibrium model introducing micro-founded internal transfers in order to capture these redistributive channels. This CGE model is calibrated on a recent social accounting matrix of Senegal dated from 2006. We base our work on three important Senegalese households surveys: ESAM I (1995), ESAM II (2002) and ESPS (2005) which provide specific data on disaggregated households, such as spending and income structures, internal transfers and some data on migration. We take into consideration altruistic behavior, self interest and social norms that influence household behavior in their decision to remit funds. Based on the work of Lucas and Stark (1985), Andreoni (1989), Cox and al. (1998) or Rapoport and Docquier (2000) we introduce a new utility function for each households member based on the notion of "tempered altruism".
To mimic the recent global food crisis (2006-2008) that has strongly affected developing countries by increasing the cost of living, especially in urban areas, we implement a scenario that reproduces the conditions of this crisis, in order to see how the households income distribution is affected.

Resource Details (Export Citation) GTAP Keywords
Category: 2011 Conference Paper
Status: Published
By/In: Presented at the 14th Annual Conference on Global Economic Analysis, Venice, Italy
Date: 2011
Created: Dienesch, E. (4/15/2011)
Updated: Dienesch, E. (4/28/2011)
Visits: 1,259
- Economic analysis of poverty
- Calibration and parameter estimation
- Africa (West)

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