Are African Households Heterogeneous Agents?: Stylized Facts on Patterns of Consumption, Employment, Income and Earnings for Macroeconomic Modelers

In: IMF Working Papers v.Working Paper No. 15/102

Abstract

This paper reviews the evidence on how households in Sub-Saharan Africa segment along consumption, income and earning dimensions relevant for quantitative macroeconomic policy models which incorporate heterogeneity. Key findings include the importance of home-grown food in the income and consumption of house-holds well up the income distribution, the lack of formal financial inclusion for all but the richest households, and the importance of non-wage income. These stylized facts suggest that an externally-generated macroeconomic shock and the short-term policy response would mainly affect the