Climate risk is particularly burdensome to small-scale farmers in developing countries due to heavy dependence on natural resources, limited and erratic rainfall with high inter- and intra-annual variability, and other natural calamities. Numerous studies on climate change suggest that climate variability is expected to increase in the next few decades, and that it is likely to be severe for tropical areas. For the design of better intervention strategies that are capable to stabilize the incomes of the poor and decrease vulnerability, it is mandatory to have a good understanding of the livelihoods of rural populations, and the risks they are facing. This paper presents an approach to measuring climate risk and its impact on livelihood outcomes in fishery-dependent communities in the ya\'eres floodplain (Far North Province of Cameroon) by applying portfolio theory and stochastic dominance rules. The focus of the analysis is put on the question, how portfolio decisions of households affect income and risk in different production systems. Assuming possible future scenarios we can derive approximate predictions of the effects of climate change and rural development interventions on income and the "riskiness" of different activity portfolios. The results suggest that the diversification effect in the study area is limited due to high correlation of income flows from different activities. However, we show that development intervention strategies, which particularly aim at changing the covariation structure of income flows, are most successful in reducing risk, and potentially increasing income.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: