Vulnerability and Responses to Risks in Rural India
AbstractUsing ARIS/REDS data set for 2006 for rural India this paper models household vulnerability as expected utility and its components. We conclude, first, that between the years 1999 and 2006 household vulnerability is most explained by poverty and idiosyncratic components. Second, for risk coping strategy, households rely heavily on informal instrument such as their own saving, transfers or capital depletion. However, they also try to cope with covariate risks by participating in government programmes. Third, household consumption is highly covariate with income. This implies that existing informal insurance instruments are not sufficient to protect household consumption against income shocks. Fourth, a coping strategy using government programmes has vulnerability (idiosyncratic risk component) reducing effects. Finally, there is a strong case for the establishment of strong safety nets in Indian villages. The existing informal strategy is inadequate as a consumption insurance mechanism whereas government programmes are found to reduce vulnerability induced by idiosyncratic shocks. However, access to such programmes is highly constrained. The expansion of suitably designed government programs has the potential of protecting households efficiently from negative shocks.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by The Australian National University, Australia South Asia Research Centre in its series ASARC Working Papers with number 2013-12.
Date of creation: 2013
Date of revision:
Contact details of provider:
Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 0200
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page: https://crawford.anu.edu.au/acde/asarc/
More information through EDIRC
Vulnerability as Expected Utility; Coping Strategy; Economic Growth; Social Safety nets;
Other versions of this item:
- Raghbendra Jha & Woojin Kang & Hari K. Nagarajan & Kailash C. Pradhan, 2012. "Vulnerability and Responses to Risk in Rural India," ASARC Working Papers 2012-05, The Australian National University, Australia South Asia Research Centre.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D18 - Microeconomics - - Household Behavior - - - Consumer Protection
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-25 (All new papers)
- NEP-DEV-2013-10-25 (Development)
- NEP-UPT-2013-10-25 (Utility Models & Prospect Theory)
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.:
- Ligon, Ethan & Laura Schechter, 2002.
Royal Economic Society Annual Conference 2002
128, Royal Economic Society.
- Alwang, Jeffrey & Siegel, Paul B. & Jorgensen, Steen L., 2001. "Vulnerability : a view from different disciplines," Social Protection Discussion Papers 23304, The World Bank.
- Bali Swain, Ranjula & Floro, Maria, 2010. "Reducing Vulnerability through Microfinance: Evidence from Indian Self Help Group Program," Working Paper Series 2010:23, Uppsala University, Department of Economics.
- Raghbendra Jha & Katsushi S Imai & Raghav Gaiha, 2009.
"Poverty, Undernutrition and Vulnerability in Rural India: Public Works versus Food Subsidy,"
- Raghbendra Jha & Katsushi S. Imai & Raghav Gaiha, 2008. "Poverty, Undernutrition and Vulnerability in Rural India: Public Works versus Food Subsidy," ASARC Working Papers 2008-08, The Australian National University, Australia South Asia Research Centre.
- Lorenzo Cappellari & Stephen P. Jenkins, 2003.
"Multivariate probit regression using simulated maximum likelihood,"
StataCorp LP, vol. 3(3), pages 278-294, September.
- Lorenzo Cappellari & Stephen P. Jenkins, 2003. "Multivariate probit regression using simulated maximum likelihood," United Kingdom Stata Users' Group Meetings 2003 10, Stata Users Group.
- Canagarajah, P. Sudharshan & Siegel, Paul B. & Heitzmann, Karin, 2002. "Guidelines for assessing the sources of risk and vulnerability," Social Protection Discussion Papers 31372, The World Bank.
- Hoddinott, John & Quisumbing, Agnes, 2003. "Methods for microeconometric risk and vulnerability assessments," Social Protection Discussion Papers 29138, The World Bank.
- Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.