Households as Corporate Firms: An Analysis of Household Finance Using Integrated Household Surveys and Corporate Financial Accounting

by Krislert Samphantharak , Robert M. Townsend

• ISBN13: 9780521124164
• ISBN10: 0521124166
• Edition: 1st
• Format: Paperback
• Copyright: 2009-11-30
• Publisher: Cambridge University Press

Summary

This investigation proposes a conceptual framework for measurement necessary for an analysis of household finance and economic development. The authors build on and, where appropriate, modify corporate financial accounts to create balance sheets, income statements, and statements of cash flows for households in developing countries, using an integrated household survey. The authors also illustrate how to apply the accounts to an analysis of household finance that includes productivity of household enterprises, capital structure, liquidity, financing, and portfolio management. The conceptualization of this analysis has important implications for measurement, questionnaire design, the modeling of household decisions, and the analysis of panel data.

Author Biography

Krislert Samphantharak is an Assistant Professor and the Charles Robins Faculty Scholar in the School of International Relations and Pacific Studies at the University of California, San Diego. Robert M. Townsend is the Elizabeth and James Killian Professor of Economics in the Department of Economics at the Massachusetts Institute of Technology. He previously was the Charles E. Merriam Distinguished Service Professor in the Department of Economics at the University of Chicago, where he remains a Researcher Professor.

Table of Contents

Preface	p. xi
Households as Corporate Firms
Introduction	p. 3
The Challenges	p. 4
Our Solution: Constructing Financial Statements from Integrated Household Surveys	p. 7
What We Learn: Some Findings from the Townsend Thai Monthly Survey	p. 11
Plan of the Monograph	p. 14
Conceptual Framework	p. 17
Households as Corporate Firms: The Analogy	p. 17
Overview of Financial Accounting	p. 20
Household Financial Accounting
Household Surveys	p. 31
Household Surveys and Household Finance	p. 31
Trade-Offs in Survey Designs	p. 34
The Townsend Thai Monthly Survey	p. 40
Constructing Household Financial Statements from a Household Survey	p. 47
Tangible Assets, Liabilities and Wealth	p. 47
Human Capital and Other Intangible Assets	p. 50
Gifts and Transfers	p. 52
Inventories and Multi-Period Production	p. 56
Outputs from One Production Activity as Inputs in Others	p. 62
Consumption of Household-Produced Outputs and Other Consumption Expenditures	p. 63
In-Kind Transactions	p. 65
Depreciation of Fixed Assets	p. 66
Livestock	p. 66
Loan Payments, Principal Repayments, and Interest Payments	p. 67
Examples	p. 68
Household Finance
Financial Analysis	p. 79
Two Case Studies	p. 80
Productivity	p. 84
Liquidity and Insurance	p. 96
Financing and Liquidity Management	p. 102
Wealth Management	p. 109
Conclusion	p. 114
An Application: Liquidity Constraints, Kinship Networks, and the Financing of Household Investment	p. 117
Investment and Liquidity Constraints	p. 119
Data	p. 121
The Nature of Household Investment	p. 127
Wealth and Liquidity Constraints	p. 136
Kinship Networks and Liquidity Constraints	p. 141
Financing Household Investment	p. 144
Conclusion	p. 149
Discussion: Measurement and Modeling	p. 151
Lessons for Household Surveys	p. 151
Limitations of Financial Accounts	p. 156
Modeling Households as Corporate Firms	p. 158
Appendix: Examples of Financial Statements	p. 165
References	p. 179
Index	p. 185
Table of Contents provided by Ingram. All Rights Reserved.