Measuring the return on household enterprise: What matters most for whom?
Name
Townsend_Measuring the.pdf
Size
925.42 KB
Format
Adobe PDF
Checksum (MD5)
adf8a6c938e625f2463942026fe46fcf
Author(s)
Samphantharak, Krislert
Townsend, Robert
Date Issued
September 2011
Journal
Journal of Development Economics
Citation
Samphantharak, Krislert, and Robert M. Townsend. “Measuring the Return on Household Enterprise: What Matters Most for Whom?” Journal of Development Economics 98, no. 1 (May 2012): 58–70.
Version
Author's final manuscript
Abstract
Return on assets (ROA) of household enterprise is crucial for understanding the productivity of households in developing economies. Yet the definition and measurement of household enterprise ROA remain inconsistent or unclear. We illustrate potential measurement problems with examples from various surveys. We take advantage of a detailed household survey and analyze what matters and for whom. The three issues that matter most for measurement of household enterprise ROA are the choice of accrual versus cash income, the treatment of household labor in enterprise income, and the treatment of non-factor income. This sensitivity matters most for a poorer region dominated by cultivation relative to a richer region with non-farm enterprises. Though the choice between accrued and cash income matters less when the frequency of the data declines, there remains high sensitivity in annualized data. We provide recommendations on how to improve the survey questionnaires for more accurate measurement in field research.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Creative Commons Attribution-Noncommercial-NoDerivatives
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1016/j.jdeveco.2011.09.001
