We identified livelihood strategies at the household level as a function of assets held using survey data from Malawi. We only included endowments that we expected to be predetermined. As expected, land, household size, age and primary education are important determinants of livelihood strategies. It also turned out to be significant regional variation in livelihood strategies, with more diversification in the southern region, and with regional variation in the role of ethnic and religious identity as determinants of livelihood strategies. In particular, we found that households from the Chewa community have more livelihood opportunities in the south, where they are in a minority.

A unique family survey was conducted in Nepal to investigate the economic consequences of having a first‐born girl. Women have more children, but we find no causal effect of number of children on economic outcomes, but independently of the number of children there is a positive effect on boys’ education of having a first‐born sister, who presumably takes care of household work so the boys can focus on school. This indicates a stronger son preference in Nepal than that found in studies from neighboring countries.

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The author tests two alternative models of price determination in informal rural credit markets, using LSMS data from Nepal. Strong support is found for a capacity-constrained collusive oligopoly model, where lenders have full information about actual borrowers and charge heterogeneous interest rates. Only marginal support is found for a competitive cost-pricing model with imperfect information. Interest rates vary with the observable characteristics of caste, installment period, and geographical region; and they decrease as village lending capacity increases up to a certain level. Interest rates do not depend on risk related variables such as land value and loan size. Copyright � 2008 The Author. Journal compilation � 2008 Blackwell Publishing Ltd.