2014
DOI: 10.1111/1477-9552.12097
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How Do Rural Households Cope with Economic Shocks? Insights from Global Data using Hierarchical Analysis

Abstract: Unanticipated events can cause considerable economic hardship for poor rural households. Some types of negative shocks, for example weather‐related agricultural losses and vector‐borne diseases, are expected to occur more frequently as a result of climate change. In this paper we measure the role of household‐ and location‐specific characteristics in conditioning behavioural responses to a wide range of idiosyncratic and covariate shocks. We use data from 8,000 rural households in 25 developing countries, comp… Show more

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Cited by 27 publications
(32 citation statements)
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References 55 publications
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“…A more recent study by Porter (2012) also finds that extremely low rainfall relative to local norms can cause significant reductions in farm income, and also on consumption whose reduction amounts to 20 percent for people in the bottom quintile of the local distribution. This is in line with Börner et al (2014) who, based on data from 25 developing countries, find that climate-related shocks predominantly result in reduced consumption. Ethiopia is arguably one of the most famine-prone countries with a long history of famines and food shortages (see for example Webb and von Braun, 1994) and such type of shortfalls are likely to occur more frequently with climate change and this may severely affect the rural poor.…”
Section: Empirical Evidence On the State Of Poverty And Its Determinantssupporting
confidence: 90%
See 1 more Smart Citation
“…A more recent study by Porter (2012) also finds that extremely low rainfall relative to local norms can cause significant reductions in farm income, and also on consumption whose reduction amounts to 20 percent for people in the bottom quintile of the local distribution. This is in line with Börner et al (2014) who, based on data from 25 developing countries, find that climate-related shocks predominantly result in reduced consumption. Ethiopia is arguably one of the most famine-prone countries with a long history of famines and food shortages (see for example Webb and von Braun, 1994) and such type of shortfalls are likely to occur more frequently with climate change and this may severely affect the rural poor.…”
Section: Empirical Evidence On the State Of Poverty And Its Determinantssupporting
confidence: 90%
“…Although other studies such as Asfaw and Braun (2004), Porter (2012) and Yilma et al (2014) report that consumption is unaffected by health shocks in rural Ethiopia, coping mechanisms in general may include sale of productive assets such as oxen, which might limit the future productivity of the household and eventually might lead to poverty (or poverty persistence) as discussed above. In line with this, Börner et al (2014) report that households tend to deplete financial and durable assets in response to death or illness or asset-related idiosyncratic shocks. Their study finds that households in sites characterised by high asset wealth tend to cope with shocks in a more proactive way than those in sites with average or below average asset wealth.…”
Section: Empirical Evidence On the State Of Poverty And Its Determinantsmentioning
confidence: 74%
“…Kalinda (2014) in a study in rural Zambia found that households in rural areas face multiple covariant and idiosyncratic shocks such as market fluctuations, adverse weather changes, degradation of natural resources, and combines a variety of coping mechanisms to prevent, mitigate and cope up with the outcomes of the shock. Borner, Shively, Wunder and Wyman (2012) argue that poor rural households are more vulnerable due to their meager resources to cope up with economic hardships and their excessive dependence on economic activities such as agriculture for which returns are highly variable. Similarly, Bonye and Aasoglenang (2013) in their study of rural livelihood diversity in Ghana reported that adverse weather conditions aggravated the incidence of poverty among households and as a result they practice different stratagies such as diversify crop cultivation, livestock rearing, petty trading and out-migrant remittances.…”
Section: Risk Exposure and Coping Mechanismsmentioning
confidence: 99%
“…Rural poverty can be considered as another dimension, since poverty tends to be higher in rural areas and presents different characteristics. Several possible causes have been discussed over the years, such as the high dependence on agriculture, which has low productivity, low added value (Quang Dao, 2004), and is very vulnerable to unanticipated climate shocks (Börner, Shively, Wunder, & Wyman, 2015). Another possible cause is relative isolation from important institutions such as schools or bigger labor markets (Stifel & Minten, 2008).…”
Section: Main Research Topics On Poverty: a Reviewmentioning
confidence: 99%