Too little too late: welfare impacts of rainfall shocks in rural Indonesia
We use regression analysis to assess the potential welfare impacts in rural Indonesia of two types of shock: a delay in monsoon onset; and a significant shortfall in rain during the 90-day post-onset period. Focusing on households with family farm businesses, we find that a delay in monsoon onset does not have a significant effect on the welfare of rice farmers. However, rice farm households located in areas exposed to low rainfall following the monsoon are negatively affected. Such households appear to be able to protect their food expenditure in the face of weather shocks, but at the expense of their non-food expenditure. We also use propensity score matching to identify community programs that might moderate the impact of this type of shock. We find that access to credit and public works projects has the strongest moderating effect. This is an important consideration for the design and implementation of adaptation strategies.
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Volume (Year): 48 (2012)
Issue (Month): 3 (December)
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References listed on IDEAS
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- Sumarto, Sudarno & Suryahadi, Asep & Pritchett, Lant, 2003. "Safety Nets or Safety Ropes? Dynamic Benefit Incidence of Two Crisis Programs in Indonesia," World Development, Elsevier, vol. 31(7), pages 1257-1277, July.
- Korkeala, Outi & Newhouse, David & Duarte, Mafalda, 2009. "Distributional impact analysis of past climate variability in rural Indonesia," Policy Research Working Paper Series 5070, The World Bank.
- Hoddinott, John & Quisumbing, Agnes, 2003. "Methods for microeconometric risk and vulnerability assessments," Social Protection and Labor Policy and Technical Notes 29138, The World Bank.
- 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 and Labor Policy and Technical Notes 29141, The World Bank.
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