Conflict and the Nature of Precautionary Wealth
The paper uses a detailed household survey to document precautionary wealth accumulation in Afghanistan, with wealth being significantly higher for households facing higher income uncertainty. Annual household expenditure on nondurable goods is als...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/569411527100270606/Conflict-and-the-nature-of-precautionary-wealth http://hdl.handle.net/10986/29882 |
| Summary: | The paper uses a detailed household
survey to document precautionary wealth accumulation in
Afghanistan, with wealth being significantly higher for
households facing higher income uncertainty. Annual
household expenditure on nondurable goods is also lower for
these households. There is no significant difference in the
wealth response to income uncertainty across high- and
low-conflict provinces. However, the constituents of
precautionary wealth vary drastically. While households in
the low-conflict regions rely almost exclusively on
livestock to iron out uncertainty, households in the
high-conflict areas also build up a reserve of gold and
silver. This shift in household portfolio suggests a more
substantial decline in real returns of livestock relative to
jewelry in high-conflict provinces. |
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