SOAS Research Online

Abstract

This article examines the impacts of the financial, food and fuel crises on poor and vulnerable households in two states of Nigeria: Lagos and Kano. It uses retrospective household-level data to analyze the impacts of induced price variability on household welfare. The results indicate that aggregate shocks have significant adverse effects on household consumption, schooling and child labour decisions, with a degree of impact heterogeneity across regions and rural and urban areas of the country. We find that the coping strategies adopted by the poor to deal with the short-term effects of the crises can lock households in a low-income equilibrium or poverty trap. Provided that covariate shocks exacerbate these effects, they become central for policy design.