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Consumption soothing and vulnerability in the Zone Lacustre, Mali

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  • Harrower, Sarah
  • Hoddinott, John

Abstract

"This paper explores risk sharing in the Zone Lacustre, Mali, as viewed through the lens of consumption smoothing. We find that idiosyncratic shocks appear to have little impact on consumption, and that households respond to these shocks in a variety of ways. In general, nonpoor households are more likely to enter into new income-generating activities while poor households are more likely to engage in credit or gift exchange or to ration consumption. When we construct a stronger test for consumption smoothing, we find that changes in household income lead to modest changes in consumption. Covariant shocks, as measured by village/round dummies, always lead to changes in consumption. These results are robust to concerns regarding bias resulting from measurement error or endogeneity of changes in income. Lastly, we find that households with access to improved water control infrastructure are less vulnerable than those that rely on rainfall or the flooding of the Niger River." Authors' Abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series FCND briefs with number 175.

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Date of creation: 2004
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Handle: RePEc:fpr:fcndbr:175

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Keywords: Vulnerability ; Consumption shocks ;

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References

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  1. Fafchamps, Marcel & Quisumbing, Agnes R., 1999. "Social roles, human capital, and the intrahousehold division of labor," FCND discussion papers 73, International Food Policy Research Institute (IFPRI).
  2. Stefan Dercon & Pramila Krishnan, 2000. "Vulnerability, seasonality and poverty in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 25-53.
  3. Haddad, Lawrence James & Adato, Michelle, 2001. "How effectively do public works programs transfer benefits to the poor?," FCND briefs 108, International Food Policy Research Institute (IFPRI).
  4. L. Christiaensen & J. Hoddinott & G. Bergeron, 2001. "Comparing village characteristics derived from rapid appraisals and household surveys: A tale from northern Mali," Journal of Development Studies, Taylor & Francis Journals, vol. 37(3), pages 1-20.
  5. Robert M. Townsend, 1995. "Consumption Insurance: An Evaluation of Risk-Bearing Systems in Low-Income Economies," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 83-102, Summer.
  6. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  7. Morduch, Jonathan, 1999. "Between the State and the Market: Can Informal Insurance Patch the Safety Net?," World Bank Research Observer, World Bank Group, vol. 14(2), pages 187-207, August.
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Cited by:
  1. Gertler, Paul & Levine, David I. & Moretti, Enrico, 2003. "Do Microfinance Programs Help Families Insure Consumption Against Illness?," Center for International and Development Economics Research, Working Paper Series qt5811j217, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
  2. Makoka, Donald, 2009. "Do rural households smooth their consumption? Applying an asset-based approach to the case of Malawi," MPRA Paper 15398, University Library of Munich, Germany.
  3. Makoka, Donald, 2008. "The impact of drought on household vulnerability: The case of rural Malawi," MPRA Paper 15399, University Library of Munich, Germany.
  4. van de Walle, Dominique, 2011. "Lasting welfare effects of widowhood in a poor country," Policy Research Working Paper Series 5734, The World Bank.
  5. Skoufias, Emmanuel & Quisumbing, Agnes R., 2004. "Consumption insurance and vulnerability to poverty : a synthesis of the evidence from Bangladesh, Ethiopia, Mali, Mexico and Russia," Social Protection Discussion Papers 29141, The World Bank.

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