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Shocks, livestock asset dynamics and social capital in Ethiopia:

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  • Mogues, Tewodaj

Abstract

This paper uses household survey panel data of 416 rural households to study livestock asset dynamics in the north-east of Ethiopia. The period under examination (1996-2003) was marked by severe environmental shocks, including a series of droughts. Using as point of departure the literature on the evolution of productive assets in the presence of risk, which relates asset paths to initial endowments, we test the hypothesis of wealth divergence and the existence of asset poverty traps. Results indicate rather that livestock asset dynamics are marked by convergence over time. Examining the role of social capital in recovery and growth of households' endowments, both local social relationships as well as ‘bridging' social capital seem to have a positive effect on asset holdings directly, as well as indirectly by mitigating the impact of income shocks on livestock capital.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series DSGD discussion papers with number 38.

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Date of creation: 2006
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Handle: RePEc:fpr:dsgddp:38

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Keywords: livestock; Household surveys; Environmental disasters; Poverty; assets; Social capital; Droughts;

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References

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  1. Travis J. Lybbert & Christopher B. Barrett & Solomon Desta & D. Layne Coppock, 2004. "Stochastic wealth dynamics and risk management among a poor population," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 114(498), pages 750-777, October.
  2. Fafchamps, Marcel, 1992. "Solidarity Networks in Preindustrial Societies: Rational Peasants with a Moral Economy," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 147-74, October.
  3. MICHAEL R. CARTER & Frederic Zimmerman, 1998. "The Dynamic Cost and Persistence of Asset Inequality in an Agrarian Economy," Wisconsin-Madison Agricultural and Applied Economics Staff Papers, Wisconsin-Madison Agricultural and Applied Economics Department 416, Wisconsin-Madison Agricultural and Applied Economics Department.
  4. Coate, Stephen & Ravallion, Martin, 1993. "Reciprocity without commitment : Characterization and performance of informal insurance arrangements," Journal of Development Economics, Elsevier, Elsevier, vol. 40(1), pages 1-24, February.
  5. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  6. Carter, Michael R. & Little, Peter D. & Mogues, Tewodaj & Negatu, Workneh, 2006. "Shocks, sensitivity and resilience: tracking the economic impacts of environmental disaster on assets in Ethiopia and Honduras," DSGD discussion papers, International Food Policy Research Institute (IFPRI) 32, International Food Policy Research Institute (IFPRI).
  7. Julian MAY & Michael R. CARTER, 1997. "Poverty, Livelihood And Class In Rural South Africa," Staff Papers, University of Wisconsin Madison, AAE 408, University of Wisconsin Madison, AAE.
  8. Grimard, Franque, 1997. "Household consumption smoothing through ethnic ties: evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, Elsevier, vol. 53(2), pages 391-422, August.
  9. Tewodaj Mogues & Michael Carter, 2005. "Social capital and the reproduction of economic inequality in polarized societies," Journal of Economic Inequality, Springer, Springer, vol. 3(3), pages 193-219, December.
  10. Rosenzweig, Mark R & Wolpin, Kenneth I, 1993. "Credit Market Constraints, Consumption Smoothing, and the Accumulation of Durable Production Assets in Low-Income Countries: Investment in Bullocks in India," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(2), pages 223-44, April.
  11. Carter, Michael R, 1997. "Environment, Technology, and the Social Articulation of Risk in West African Agriculture," Economic Development and Cultural Change, University of Chicago Press, vol. 45(3), pages 557-90, April.
  12. Rosenzweig, Mark R., 1986. "Risk, Implicit Contracts and the Family in Rural Areas of Low-Income Countries," Bulletins, University of Minnesota, Economic Development Center 7518, University of Minnesota, Economic Development Center.
  13. Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, Elsevier, vol. 55(2), pages 273-305, April.
  14. Stiglitz, Joseph E, 1990. "Peer Monitoring and Credit Markets," World Bank Economic Review, World Bank Group, World Bank Group, vol. 4(3), pages 351-66, September.
  15. Carter, Michael R. & Maluccio, John A., 2003. "Social Capital and Coping with Economic Shocks: An Analysis of Stunting of South African Children," World Development, Elsevier, Elsevier, vol. 31(7), pages 1147-1163, July.
  16. Fafchamps, Marcel & Minten, Bart, 1998. "Relationships and traders in Madagascar," MTID discussion papers, International Food Policy Research Institute (IFPRI) 24, International Food Policy Research Institute (IFPRI).
  17. Michael Carter & Christopher Barrett, 2006. "The economics of poverty traps and persistent poverty: An asset-based approach," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 42(2), pages 178-199.
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Citations

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Cited by:
  1. Liverpool, Lenis Saweda O. & Winter-Nelson, Alex, 2010. "Asset versus consumption poverty and poverty dynamics in the presence of multiple equilibria in rural Ethiopia," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 971, International Food Policy Research Institute (IFPRI).
  2. Carter, Michael R. & Little, Peter D. & Mogues, Tewodaj & Negatu, Workneh, 2005. "Shocks, Sensitivity and Resilience: Tracking the Economic Impacts of Environmental Disaster on Assets in Ethiopia and Honduras," Staff Paper Series, University of Wisconsin, Agricultural and Applied Economics 489, University of Wisconsin, Agricultural and Applied Economics.
  3. Stefan Dercon & Tessa Bold & Joachim De Weerdt & Alula Pankhurst, 2004. "Group-based Funeral Insurance in Ethiopia and Tanzania," CSAE Working Paper Series 2004-27, Centre for the Study of African Economies, University of Oxford.
  4. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09iatsh0to2 is not listed on IDEAS
  5. Alberto E. Chong & David A. Fleming & Hernán D. Bejarano, 2011. "Trust and Trustworthiness in the Aftermath of Natural Disasters: Experimental Evidence from the 2010 Chilean Earthquake," Working Papers, The George Washington University, Institute for International Economic Policy 2011-15, The George Washington University, Institute for International Economic Policy.
  6. Stefan Dercon (QEH), Joachim De Weerdt, Tessa Bold, Alula Pankhurst, . "Membership Based Indigenous Insurance Associationsin Ethiopia and Tanzania," QEH Working Papers, Queen Elizabeth House, University of Oxford qehwps126, Queen Elizabeth House, University of Oxford.
  7. Carter, Michael R. & Little, Peter D. & Mogues, Tewodaj & Negatu, Workneh, 2007. "Poverty Traps and Natural Disasters in Ethiopia and Honduras," World Development, Elsevier, Elsevier, vol. 35(5), pages 835-856, May.
  8. Chung Wing Tse, Jianwen Wei, Yihan Wang, 2013. "Social Capital and Disaster Recovery: Evidence from Sichuan Earthquake in 2008-Working Paper 344," Working Papers, Center for Global Development 344, Center for Global Development.
  9. Ruben Durante, 2010. "Risk, Cooperation and the Economic origins of social Trust: an empirical Investigation," Sciences Po publications info:hdl:2441/eu4vqp9ompq, Sciences Po.

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