Foundations for Local Economy-wide Impact Evaluation
Foundations for Local Economy-wide Impact Evaluation
This chapter lays out the methodological foundations for local economy-wide impact evaluation (LEWIE). Understanding how the local economy works is the starting point for all of the methods in this book. A “meta-SAM” is introduced as the framework for understanding the workings of the project-area economy and providing a basis for constructing LEWIE models. It nests elemental SAMs for the key actors, including households, firms, or household-farms that may or may not be affected directly by the program, policy, or market shock under study. It highlights production and consumption activities as well as ways in which markets connect actors within the local economy. It also provides the basic data input for most, though not all, LEWIE models. To illustrate, a simple, stylized meta-SAM is constructed for an economy consisting of two household groups: poor households, which are eligible for a poverty program, and non-poor ones, which are not.
Keywords: social accounting matrix, SAM, markets, production, demand, household models, agricultural household, village economy
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