The Household Economy Approach (HEA) is a livelihoods-based framework for analysing how people obtain access to the things they need to survive and prosper. This Practitioners’ Guide from the Regional Hunger and Vulnerability Programme (RHVP), FEG Consulting and Save the Children provides tools for those involved in fieldwork and analysis of HEA assessments. Central issues in HEA analysis include: how people in different social and economic circumstances get the food and cash they need; their assets, opportunities and constraints; and the options open to them at times of crisis.
HEA is based on the principle that understanding people’s normal economy is crucial to gauging the impact of shocks on households and to planning interventions that support existing survival strategies. It is an analytical framework that defines what information needs to be collected and analysed in order to answer a particular set of questions. Both primary and secondary sources of information are used. HEA can be used to consider the effects of both positive and negative changes.
The ‘Baseline’ of HEA is a depiction of how people get by from year to year and the connections with other people and places that enable this. It has three components: livelihood zoning, wealth breakdown and analysis of livelihood strategies for each of the identified wealth groups:
- Livelihood zoning is the delineation of areas within which people share broadly the same patterns of livelihood. It provides a livelihoods-based sampling frame, allows geographical targeting of assistance and enables the customisation of monitoring indicators.
- Wealth breakdown is the grouping of people based on local definitions of wealth and the quantification of assets. This shows differences in households’ vulnerabilities to shocks and allows estimates of numbers of people who will be affected.
- Analysis of livelihood strategies is the categorisation and quantification of people’s sources of food and income and expenditure patterns, using a common currency. It enables comparisons to be made across wealth groups and livelihood zones, facilitating prioritisation of resources.
The ‘Outcome Analysis’ is the investigation of how baseline access to food and income might change as a result of a specific hazard or positive change. It consists of three steps: problem specification; analysis of coping strategy; and projected outcome:
- The problem specification is the translation of a hazard or other shocks into economic consequences at household level. It allows the shock or positive change to be mathematically linked to each relevant livelihood strategy.
- Analysis of coping capacity examines the ability of households to respond to a hazard. It helps determine how to support people’s own efforts and provide assistance before households resort to damaging strategies.
- The projected outcome is a consideration of the extent to which households will be able to: meet their basic survival needs (the survival threshold); and protect their basic livelihoods (livelihoods protection threshold).
- The projected outcome clearly predicts when assistance is needed to help people survive or protect their livelihoods. It also models the potential benefits of proposed policies or programmes.
