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Shocks, Sensitivity and Resilience: Tracking the Economic Impacts of Environmental Disaster on Assets in Ethiopia and Honduras

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Author Info

  • Carter, Michael R.

    (U of Wisconsin)

  • Little, Peter D.

    (U of Kentucky)

  • Mogues, Tewodaj

    (U of Wisconsin)

  • Negatu, Workneh

    (Addis Ababa U)

Abstract

Droughts, hurricanes and other environmental shocks punctuate the lives of poor and vulnerable populations in many parts of the world. The direct impacts can be horrific, but what are the longer-term effects of such shocks on households and their livelihoods? Under what circumstances, and for what types of households, will shocks push households into poverty traps from which recovery is not possible? In an effort to answer these questions, this paper analyzes the asset dynamics of Ethiopian and Honduran households in the wake of severe environmental shocks. While the patterns are different across countries, both reveal worlds in which the poorest households struggle most with shocks, adopting coping strategies which are costly in terms of both short term and long term well-being. There is some evidence that shocks threaten long term poverty traps and that they tend to militate against any tendency of the poor to catch up with wealthier households. Policy implications are discussed in terms of access to markets and the design of government safety net programs.

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File URL: http://www.aae.wisc.edu/pubs/sps/pdf/stpap489.pdf
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Bibliographic Info

Paper provided by University of Wisconsin, Agricultural and Applied Economics in its series Staff Paper Series with number 489.

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Date of creation: Aug 2005
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Handle: RePEc:ecl:wisagr:489

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  1. Mogues, Tewodaj & Carter, Michael, 2005. "Social capital and the reproduction of economic inequality in polarized societies," DSGD discussion papers 25, International Food Policy Research Institute (IFPRI).
  2. Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, vol. 55(2), pages 273-305, April.
  3. Quisumbing, Agnes R., 2003. "Food aid and child nutrition in rural Ethiopia," FCND briefs 158, International Food Policy Research Institute (IFPRI).
  4. Dercon, Stefan, 1998. "Wealth, risk and activity choice: cattle in Western Tanzania," Journal of Development Economics, Elsevier, vol. 55(1), pages 1-42, February.
  5. John Hoddinott, 2006. "Shocks and their consequences across and within households in Rural Zimbabwe," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 301-321.
  6. Boucher, Stephen R. & Barham, Bradford L. & Carter, Michael R., 2005. "The Impact of "Market-Friendly" Reforms on Credit and Land Markets in Honduras and Nicaragua," World Development, Elsevier, vol. 33(1), pages 107-128, January.
  7. Mogues, Tewodaj, 2006. "Shocks, livestock asset dynamics and social capital in Ethiopia:," DSGD discussion papers 38, International Food Policy Research Institute (IFPRI).
  8. Morris, Saul S. & Neidecker-Gonzales, Oscar & Carletto, Calogero & Munguia, Marcial & Medina, Juan Manuel & Wodon, Quentin, 2002. "Hurricane Mitch and the Livelihoods of the Rural Poor in Honduras," World Development, Elsevier, vol. 30(1), pages 49-60, January.
  9. Michael Carter & Christopher Barrett, 2006. "The economics of poverty traps and persistent poverty: An asset-based approach," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 178-199.
  10. Mogues, Tewodaj & Carter, Michael R., 2004. "Social Capital and the Reproduction of Inequality in Socially Polarized Economies," Staff Paper Series 476, University of Wisconsin, Agricultural and Applied Economics.
  11. Valdes, Alberto & Lopez, Ramon E., 1999. "Fighting Rural Poverty In Latin America: New Evidence And Policy," 1999 Annual meeting, August 8-11, Nashville, TN 21581, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  12. Frederic Zimmerman & MICHAEL R. CARTER, . "Asset Smoothing, Consumption Smoothing and the Reproduction for Inequality under Risk and Subsistence Constraints," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 402, Wisconsin-Madison Agricultural and Applied Economics Department.
  13. Peter Little & M. Priscilla Stone & Tewodaj Mogues & A. Peter Castro & Workneh Negatu, 2006. "'Moving in place': Drought and poverty dynamics in South Wollo, Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 200-225.
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Cited by:
  1. World Bank, 2007. "Ethiopia - Accelerating Equitable Growth : Country Economic Memorandum, Part 2. Thematic Chapters," World Bank Other Operational Studies 7866, The World Bank.
  2. Murendo, Conrad & Keil, Alwin & Zeller, Manfred, 2010. "Drought impacts and related risk management by smallholder farmers in developing countries: evidence from Awash River Basin, Ethiopia," Research in Development Economics and Policy (Discussion Paper Series) 114750, Universitaet Hohenheim, Department of Agricultural Economics and Social Sciences in the Tropics and Subtropics.
  3. World Bank, 2008. "Ethiopia - A Country Study on the Economic Impacts of Climate Change," World Bank Other Operational Studies 8030, The World Bank.
  4. Barnett, Barry J. & Barrett, Christopher B. & Skees, Jerry R., 2008. "Poverty Traps and Index-Based Risk Transfer Products," World Development, Elsevier, vol. 36(10), pages 1766-1785, October.
  5. Mogues, Tewodaj, 2006. "Shocks, livestock asset dynamics and social capital in Ethiopia:," DSGD discussion papers 38, International Food Policy Research Institute (IFPRI).
  6. Alejandro de la Fuente, 2007. "Climate Shocks and their Impact on Assets," Human Development Occasional Papers (1992-2007) HDOCPA-2007-23, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
  7. Kebede, Sindu & Fekadu, Belay & Aredo, Dejene, 2011. "Trade Liberalization and Poverty: A Macro-Micro Analysis in Ethiopia," Proceedings of the German Development Economics Conference, Berlin 2011 44, Verein für Socialpolitik, Research Committee Development Economics.
  8. Fisher, Monica & Chaudhury, Moushumi & McCusker, Brent, 2010. "Do Forests Help Rural Households Adapt to Climate Variability? Evidence from Southern Malawi," World Development, Elsevier, vol. 38(9), pages 1241-1250, September.
  9. Jacques Christophe Diderot Julien, 2005. "Medición del impacto del huracán Mitch en el bienestar de los hogares de Nicaragua," DOCUMENTOS CEDE 006736, UNIVERSIDAD DE LOS ANDES-CEDE.

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