2020 Young Statisticians' Prize Award winner - Madi Mangan

Gambia kids

Congratulations to the 2020 IAOS Young Statisticians' Prize Award winner Madi Mangan!

 

Household Consumption Allocation and the Collective Household Model: Children Share of Household Resources in The Gambia

 

About the Author, Madi Mangan
Madi Mangan is a Statistician with the Economic Statistics Division of The Gambia Bureau of Statistics (GBoS). He holds a Master of Science in Economics (Cum Laude) from the University of Verona, Italy in 2019 and a Bachelor of Science in Economics and Finance from the University of The Gambia in 2015. Besides his engagements at GBoS, he lectures on the topic of Principles of Economics II (Introduction to Macroeconomics) to first-year bachelors students at the University of the Gambia and train students on use of software applications at the American International University West Africa, the Gambia. Madi is focused on the measurement of the informal economy, household final consumption expenditure and the production of the GDP by expenditure. At the GBoS, he became the first to attempt the measure of the informal economy in 2017. This significantly helped in improving the preciseness of the rebased GDP figures for base year 2014.  He is currently developing a methodological guide for measurement of the informal economy in developing economies with limited data.  

During his master’s studies he had the opportunity to be exposed to very meaningful developments in his study career which drastically changed his thinking. He became as he puts it, “capitivated by micro- and macroeconomics, econometric models, project evaluation, welfare and the study of micro- and macroeconomics measures of welfare.”  This concentration of interests largely stemmed from his background — being raised in rural areas — and his experience and familiarity with characteristics of rural populations.  

Madi is enrolled in a double doctoral program in Economics to start this September With the Ca’ Foscari University of Venice, Italy and Vrije University of Amsterdam, Holland. Funded by the Network for Studies on Pension, Ageing and Retirement (NETSPAR), Mangan will have his research done on “Micro effects of Macroprudential Policies” with NETSPAR. During his free time, he likes to read, participate in voluntary activities, spend time with students, or be at the seaside. He founded the Life Transformation Foundation, the Gambia, a non-political charitable organization working to reduce street begging in the Gambia and to stop the cycle of intergenerational poverty. He also, volunteers at the Soil Solution Gambia to support, as he states, “cultivating communities that grow,” and currently acts as its Executive Secretary.

 

Household Consumption Allocation and the Collective Household Model: Children Share of Household Resources in The Gambia

Summary of a Paper by Madi Mangan, Gambia Bureau of Statistics - Submitted for the 2020 IAOS Young Statisticians Prize Competition

This paper applies the collective household model to allocate household resources among household members. With a collective quadratic Almost Ideal Demand System (CQUAIDS) estimated by a Feasible Generalized Nonlinear Least Squares (FGNLS), it describes the household demand for six categories of household goods using household income and expenditure survey data of The Gambia.  The research related to this study was directed to understanding the allocation of resources among young and adult members of households in The Gambia. It establishes the sharing rule for children and adult members of the household and shows the effect of demographic, distributive factor, price and income elasticities on the shares of household resources. The evidence establishes that a higher share of resources goes for children while the sharing rule varies for different household types. Also, the study shows significant effects of demographic, distributive factor, price and income on the allocation of the household resources among consumption goods by the household. 

Household consumption is one of the most important indicators of development, as it gives a detailed view of the standard of living of a population. Household consumption currently accounts for about 70 per cent of Gross Domestic Product (GDP) of most developed and developing economies. This is a key motivation to examine in detail the household economy, consumption patterns and allocation of consumption resources to study the status of people in the household. 

Considerable attention has been given to the study of the household economy and the available microeconomic theory. However, the concept of individualism in the household was never taken seriously until the publication of a landmark book by Gary S. Becker, A Treatise on the Family, in 1981. Households were rather treated as if they were an individual, with little consideration of the special preference of individuals within the household. This traditional view was standard and was used to model the majority of investigations relating to household behavior since 1981. Such a configuration of the household economy is called a unitary model. This model considers the household behaviour that maximizes a unique, price independent social utility.  It has several limitations because it is not adequate to describe the observed behaviour of households consisting of multiple individuals. 

Given these factors, the author chose to use a collective model built on the fundamentals of methodological individualism. The collective model addresses the question of how individual preferences lead to a collective choice and how household members reconcile different preferences.

The Gambia Integrated Household Survey (IHS) for 2015-2016 was employed for the study. The IHS is an income and expenditure survey conducted at five-year intervals by The Gambia Bureau of Statistics (GBoS) with support from the World Bank and various development partners for the study of households and individuals living in The Gambia. Details relating to the methodology, study results, datasets used, conclusions and recommendations are provided in the paper.