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In Kenya, it is estimated that 60 to 80% of urban residents live in slum or slum-like conditions. This study investigates expenditures patterns of slum dwellers in Nairobi, their coping strategies and the determinants of those coping strategies.

We use a dataset from the Indicator Development for Surveillance of Urban Emergencies (IDSUE) research study conducted in four Nairobi slums from April 2012 to September 2012. The dataset includes information related to household livelihoods, earned incomes of household members, expenditures, shocks, and coping strategies.

Food spending is the single most important component, accounting for 52% of total households' income and 42% of total expenditures. Households report a variety of coping strategies over the last four weeks preceding the interview. The most frequently used strategy is related to reduction in food consumption, followed by the use of credit, with 69% and 52% of households reporting using these strategies respectively. A substantial proportion of households also report removing children from school to manage spending shortfalls. Formal employment, owning a business, rent-free housing, belonging to the two top tiers of income brackets, and being a member of social safety net reduced the likelihood of using any coping strategy. Exposure to shocks and larger number of children under 15 years increased the probability of using a coping strategy.

Policies that contain food price inflation, improve decent-paying job opportunities for the urban poor are likely to reduce the use of negative coping strategies by providing urban slum dwellers …