Measurement and Analysis of Financial Systems in Developing Economies

Authors

Krislert Samphantharak, University of California San Diego
Robert M. Townsend, Massachusetts Institute of Technology

Abstract

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 financed accounts to create balance sheets, income statements, and statements of cash flow 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.