Journal article
J. Animashaun, A. Wossink
Social Science Research Network, 2023
Social Science Research Network, 2023
Semantic Scholar
DOI
Cite
Cite
APA
Click to copy
Animashaun, J., & Wossink, A. (2023). How Do Households Cope During Aggregate Shocks? Evidence from the 2009-2015 Oil Crisis in Nigeria. Social Science Research Network.
Chicago/Turabian
Click to copy
Animashaun, J., and A. Wossink. “How Do Households Cope During Aggregate Shocks? Evidence from the 2009-2015 Oil Crisis in Nigeria.” Social Science Research Network (2023).
MLA
Click to copy
Animashaun, J., and A. Wossink. “How Do Households Cope During Aggregate Shocks? Evidence from the 2009-2015 Oil Crisis in Nigeria.” Social Science Research Network, 2023.
BibTeX Click to copy
@article{j2023a,
title = {How Do Households Cope During Aggregate Shocks? Evidence from the 2009-2015 Oil Crisis in Nigeria},
year = {2023},
journal = {Social Science Research Network},
author = {Animashaun, J. and Wossink, A.}
}
Abstract
The effect of global oil price fluctuations on household s’ costs of living in Nigeria is examined. We extend a simplified model of the microeconomic implication of macroeconomic shocks that allows for cross-sectional heterogeneity in households’ distribut ions and consumption preferences. First, we show the effect of global oil price shocks heterogeneously varies depending on household s’ preferences and consumption bundles. Second, due to the oil economies' enclave nature, we show that shocks would create a specific distributional effect that is more pronounced on households closely related to the oil economy. For the empirical analysis, we use oil prices between the years 2009 to 2015, and micro-level data from the Nigerian General Household Survey (GHS) collected between 2010 and 2016 in Nigeria. Our empirical results confirm our prediction: oil prices differ depending on how closely the regional economy is tied to oil production. We also find evidence supporting consumption substitution strategies, adjustments in household size, and labor supply as some coping responses to oil price changes.