HEA, Livelihoods, and Baselines

Household Economy Analysis and Livelihoods

Household Economy Analysis (HEA) is a livelihoods-based analytical framework used to understand the specific economic actions (food production, sales, expenses) a household takes to survive. It assumes that understanding the normal household economy is essential to predicting how a crisis will impact livelihoods. This allows decision makers to plan interventions that will support, rather than undermine, existing survival strategies. 

HEA is a systems-based approach. It aims to build a holistic picture of livelihoods. This means that each piece of information gathered has to make sense in relation to the rest.

HEA bridges the concepts of livelihoods and household economy:

• Livelihoods are the broad, sustainable strategies of making a living among related groups of households. This can encompass social, cultural, and political factors (such as access to community services, power dynamics, and social status). Livelihood Strategies are specific ways in which these household groups use and combine their assets to obtain food, income, and other goods and services.

• Household economy is the collection of economic, measurable components of a livelihood strategy. This includes the ways in which a “typical” household (that is, a hypothetical household representing a group of households) acquires its income, savings, and asset holdings, and by which it meets its food and non-food needs.

In HEA, a household is defined as a set of people who live together most of the time, contribute to a common economy, and share the food and other income from this. Or, according to WFP, a group of people who “eat from the same pot.” Individuals that are not part of a household can live together but not “eat from the same pot” as living under the same roof reduces per person rent, utilities, etc. even if the individuals are not otherwise sharing their income and other resources.

Livelihood Zones and Baselines

HEA groups households in two ways: geo-spatially into Livelihood Zones, and cross-sectionally into Wealth Groups.

• The first part of the HEA process includes a livelihood zoning exercise that is conducted through interviews, workshops, and a secondary data review. Outputs of that exercise include a map of Livelihood Zones for the country, as well as the population of and a description for each zone. Livelihood Zones are geographical areas within which people share broadly the same patterns of access to food and income (that is, they grow the same crops, or keep the same types of livestock), and have similar access to markets. It represents the constraints that geography and market access place on options for making a living available to households in a given area.

  • Example: People living in a fertile highland area might pursue an agricultural pattern of livelihood while those living in a semi-arid lowland area may be either pastoralists or agro-pastoralists.

  • Example: Consider two zones in the same country with similar soil types, average rainfall, and wealth characteristics. In the East they grow predominantly millet due to greater drought frequency and in the West they grow predominantly sorghum. Millet and sorghum are similar but different crops with different vulnerability to water stress. Therefore, these areas are may be characterized as different livelihood zones.

• Wealth Groups are groups of households within the same community who share similar capacities to exploit the different food and income options within a particular Livelihood Zone. Households are grouped together using local definitions of wealth and the quantification of their assets. The level of division depends on how the community view their society, and the purpose of the analysis.

These divisions are used to create livelihood Baselines. A Baseline is a quantified analysis of sources of food, income, and expenditure for households in all wealth groups in a single Livelihood Zone over a defined reference year.

A Livelihood Zone may have more than one Baseline associated with it, either updating information as things change over time or representing different parts of large livelihood zones. Baselines need to be updated when new crops, livestock or expenditures arise, or after 10 years when the Integrated Food Security Phase Classification System considers the data to be invalid.

Baseline data is most commonly stored in Baseline Storage Sheets (BSS), spreadsheets which are the primary source of data for this platform. Analysts may use narrative profile reports, available on the FEWS NET website, to assist in interpreting baseline data.

Primary Livelihood Systems

The dominant patterns of livelihoods identified in the development of a Livelihood Zone map, for example pastoralism, fisheries, or irrigated cropping, are called Primary Livelihood Systems or production systems. Not all households within a livelihood zone will look the same from a livelihood or production standpoint, but one type of system is deemed predominant for each Livelihood Zone during the mapping phase.

Descriptions of the Primary Livelihood Systems found in LEX are available on the Search and Filter page.

According to the Practitioner’s Guide to HEA:

The system of production is determined by a range of factors, of which geography is clearly the most important. Other factors include the marketing system (e.g. demand for one product as compared to another, the experience and capital resources of traders), the financial and banking system (e.g. availability and affordability of credit) and government policy (e.g. development policy, pricing policy, policy on the provision of production inputs, etc.). It is quite possible for two livelihood zones to be similar geographically and agroclimatologically, but for one to be based, for example, upon food and livestock production, while another is given over to the production of sugarcane because agro-ecological conditions are favourable, farmers in the zone are encouraged to grow the crop, there is a processing factory nearby and there are good roads/railways to transport the final product to market.

See the glossary for more definitions.

Livelihood Strategies and Activities

A Livelihood Strategy is one of a set of options used by households in a Livelihood Zone to obtain food and cash income and acquire the items needed to live. They are categorized by type for ease of comparison. Livelihood Strategy Types include things like milk production, crop production, food purchase, relief aid, and wild food gathering. See a full list.

Each Livelihood Zone has a set of possible Livelihood Strategies. When one of those Strategies is used by a specific Wealth Group in the Livelihood Zone, it is a Livelihood Activity.