Drought and saving in West Africa: are livestock a buffer stock?

TLDR

Households in the West African semi‑arid tropics face substantial drought risk, and it has long been hypothesized that they keep livestock as a buffer stock to insulate consumption from income fluctuations. This paper tests the hypothesis that livestock serve as a buffer stock for consumption smoothing. Results show livestock transactions provide only about 15–30 % of income shortfalls from village‑level shocks, indicating a weaker consumption‑smoothing role than assumed.

Abstract

Households in the West African semi-arid tropics (WASAT) face substantial risk—an inevitable consequence of engaging in rainfed agriculture in a drought-prone environment. It has long been hypothesized that these households keep livestock as a buffer stock to insulate their consumption from income fluctuations. This paper tests this hypothesis. Results indicate that livestock transactions play less of a consumption smoothing role than often assumed. Livestock sales compensate for at most thirty percent, and probably closer to fifteen percent of income shortfalls due to village-level shocks alone. We discuss possible explanations for these results and suggest directions for future work.