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Hurricane Mitch and consumption growth of Nicaraguan agricultural households

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  • Patrick Premand
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    Abstract

    Risk has been presented as a cause of poverty persistence under imperfect insurance mechanisms.� This paper assesses the ex post effect of hurricane Mitch on consumption growth of Nicaraguan agricultural households.� How persistent was Mitch's direct impact beyond October 1998 damage?� A nationally representative panel is available for 1998 and 2001, but affected households were also re-surveyed in 1999.� Given the data design, idiosyncratic and common dimensions of the shock can be disentangled, together with its short and medium-term impacts.� Satellite rainfall observations are interpolated at municipal centres to complement survey reports of hurricane-induced losses.� Within the treated sample, micro-growth model estimates only point to a limited short-term negative impact of idiosyncratic damage, at most through floods and displacement.� Mitch's medium-term common impact is considered in an experimental set-up.� Households affected by Mitch do not suffer from lower growth between 1998 and 2001, even accounting for spatial heterogeneity.� Overall, hurricane Mitch's direct consumption impact thus exhibits little persistence.

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    Bibliographic Info

    Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number WPS/2008-06.

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    Date of creation: 01 Jan 2008
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    Handle: RePEc:oxf:wpaper:wps/2008-06

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    Keywords: Risk; Growth; Natural Experiment;

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