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Gauging the welfare effects of shocks in rural Tanzania

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  • Christiaensen, Luc
  • Hoffmann, Vivian
  • Sarris, Alexander

Abstract

Studies of risk and its consequences tend to focus on one risk factor, such as a drought or an economic crisis. Yet 2003 household surveys in rural Kilimanjaro and Ruvuma, two cash-crop-growing regions in Tanzania that experienced a precipitous coffee price decline around the turn of the millennium, identified health and drought shocks as well as commodity price declines as major risk factors, suggesting the need for a comprehensive approach to analyzing household vulnerability. In fact, most coffee growers, except the smaller ones in Kilimanjaro, weathered the coffee price declines rather well, at least to the point of not being worse off than non-coffee growers. Conversely, improving health conditions and reducing the effect of droughts emerge as critical to reduce vulnerability. One-third of the rural households in Kilimanjaro experienced a drought or health shocks, resulting in an estimated 8 percent welfare loss on average, after using savings and aid. Rainfall is more reliable in Ruvuma, and drought there did not affect welfare. Surprisingly, neither did health shocks, plausibly because of lower medical expenditures given limited health care provisions.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4406.

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Date of creation: 01 Nov 2007
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Handle: RePEc:wbk:wbrwps:4406

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Keywords: Health Monitoring&Evaluation; Crops&Crop Management Systems; Access to Finance; Rural Poverty Reduction;

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References

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Cited by:
  1. Lars Osberg, 2010. "Measuring Economic Insecurity and Vulerability as Part of Economic Well-Being: Concepts and Context," Department of Economics at Dalhousie University working papers archive osberg_measuring_economic, Dalhousie, Department of Economics.
  2. Martine AUDIBERT, 2008. "Endemic diseases and agricultural productivity: Challenges and policy response," Working Papers 200823, CERDI.
  3. Wagstaff, Adam & Lindelow, Magnus, 2010. "Are health shocks different ? evidence from a multi-shock survey in Laos," Policy Research Working Paper Series 5335, The World Bank.
  4. Jean-Pierre Tranchant & Patricia Justino & Cathérine Müller, 2014. "Political Violence, Drought and Child Malnutrition: Empirical Evidence from Andhra Pradesh, India," HiCN Working Papers 173, Households in Conflict Network.
  5. Lars Osberg & Andrew Sharpe, 2012. "Measuring Economic Insecurity in Rich and Poor Nations," CSLS Research Reports 2012-03, Centre for the Study of Living Standards.

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