30% of total household production while in Ondo is less than 3%. Similarly rice constitutes over 10% of total expenditures in Sokoto but only 2% in Kwara. A similar degree of variation exists for beans as well.

As explained above, oil plays a key role in Nigerian conflict, especially in the Niger Delta states. To test for its direct effect on conflict via the rapacity hypothesis, we construct an oil price oil index by interacting the oil production value in 2003 with the international oil price (Pst = oils × oilprt). We use oil production data published in the Nigerian National Petroleum Coporation (NNPC) Annual Statistical Bulletin. However, because this data is only reported at the oil well level and not at the state level, we had to systematically map the oil wells to a state. To do that we use a combination of online google search and geo-mapping using longitude and latitudes of the oil well mapped to the state.

The oil index variable should be exogenous to conflict. First, Nigeria is a price taker in the international oil market as it is a small producer (Nigeria produced approximately 2.8% of world oil production 2012).<sup>16</sup> In addition, oil production at the beginning of the period should not be influenced by subsequent conflict, especially as we control for past conflict level (in case there is persistence over time). Given the absence of GDP data by state we normalize the production by state-wise receipts of Value Added Tax (VAT) in 2003 (Source: NBS, 2010). The VAT is a tax levied on products and services, based on the contribution to output at each stage of production. Thus low levels of VAT receipts indicate low levels of economic activity, and vice versa.

# **4.2. Survey description and summary**

The survey was designed to collect household characteristics such as demography, education, health, and migration, for the purpose of poverty analysis. The survey covered the urban and rural areas of all the 36 States of the Federation and the Federal Capital Territory. Ten Enumeration Areas (EAs) were studied in each of the States every month while 5 EAs were covered in Abuja. Information on food expenditure and production by 18770 households was considered.

Part B of the questionnaire asked respondents questions on household’s consumption, including both expenditures and agricultural activities at the household level. Household expenditure is categorized into non-food and food expenses.<sup>17</sup> The former is in turn divided into frequently and less frequently purchased items.

Table 1 shows that the mean per capita food expenditure is highest in the South South and South East regions, which house the major oil producing wells. The South East region had mean total per capita expenditure of N 45,216, which is well above the national average. However, the more urban South West region had the highest levels of per capita noon-food expenditures.

> 16 <u>http://www.eia.gov/countries/country-data.cfm?fips=NI. Accessed April 29, 2014.</u>

> 17 The expenditure on food by household is a sum of expenditure on each individual food item over 6 visits. That is, aggregation of the response to the question, “How much was spent on ... since my last visit?”

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