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Shocks, Consumption and Income Diversification in Rural Ethiopia

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  • Catherine Porter

Abstract

We present new evidence that households are unable to protect themselves from rainfall failure that occurs on average every five years in rural Ethiopia. However, other less extreme rainfall variation and idiosyncratic shocks such as illness and crop pests do not impact significantly on consumption. Agricultural shocks impact negatively on farm income as expected, however they also stimulate non-agricultural earnings by an equivalent amount. In the case of a covariate shock such as severe rainfall failure, this smoothing mechanism may be ineffective and rainfall insurance or drought-triggered safety nets could provide further protection.

Suggested Citation

  • Catherine Porter, 2012. "Shocks, Consumption and Income Diversification in Rural Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 48(9), pages 1209-1222, September.
  • Handle: RePEc:taf:jdevst:v:48:y:2012:i:9:p:1209-1222
    DOI: 10.1080/00220388.2011.646990
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. repec:eee:wdevel:v:96:y:2017:i:c:p:65-77 is not listed on IDEAS
    2. Hill, Ruth Vargas & Porter, Catherine, 2017. "Vulnerability to Drought and Food Price Shocks: Evidence from Ethiopia," World Development, Elsevier, vol. 96(C), pages 65-77.
    3. repec:gam:jsusta:v:9:y:2017:i:6:p:1014-:d:101276 is not listed on IDEAS
    4. Tesfamicheal Wossen & Salvatore Falco & Thomas Berger & William McClain, 2016. "You are not alone: social capital and risk exposure in rural Ethiopia," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(4), pages 799-813, August.
    5. Sirikarn Lertamphainont & Robert Sparrow, 2016. "The Economic Impacts of Extreme Rainfall Events on Farming Households: Evidence from Thailand," PIER Discussion Papers 45, Puey Ungphakorn Institute for Economic Research, revised Oct 2016.
    6. repec:eee:jfpoli:v:74:y:2018:i:c:p:154-161 is not listed on IDEAS
    7. Ayala Wineman & Nicole M. Mason & Justus Ochieng & Lilian Kirimi, 2017. "Weather extremes and household welfare in rural Kenya," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(2), pages 281-300, April.
    8. Jackeline Velazco & Ramon Ballester, 2016. "Food Access and Shocks in Rural Households: Evidence from Bangladesh and Ethiopia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(2), pages 527-549, November.
    9. Murata, Akira & Miyazaki, Suguru, 2014. "Ex-post Risk Management Among Rural Filipino Farm Households," Working Papers 67, JICA Research Institute.
    10. Javier E. Baez & Leonardo Lucchetti & Maria E. Genoni & Mateo Salazar, 2017. "Gone with the Storm: Rainfall Shocks and Household Wellbeing in Guatemala," Journal of Development Studies, Taylor & Francis Journals, vol. 53(8), pages 1253-1271, August.
    11. repec:spr:endesu:v:20:y:2018:i:2:d:10.1007_s10668-016-9896-2 is not listed on IDEAS
    12. Alem, Yonas & Maurel, Mathilde & Millock, Katrin, 2016. "Migration as an Adaptation Strategy to Weather Variability: An Instrumental Variables Probit Analysis," Working Papers in Economics 665, University of Gothenburg, Department of Economics.
    13. Holden , Stein & Fischer, Monica, 2015. "Can Adoption of Improved Maize Varieties Help Smallholder Farmers Adapt to Drought? Evidence from Malawi," CLTS Working Papers 1/15, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    14. David I. Levine & Dean Yang, 2014. "The Impact of Rainfall on Rice Output in Indonesia," NBER Working Papers 20302, National Bureau of Economic Research, Inc.
    15. Stein Holden & Monica Fisher, 2015. "Subsidies promote use of drought tolerant maize varieties despite variable yield performance under smallholder environments in Malawi," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 7(6), pages 1225-1238, December.
    16. Schmidt, Emily & Bekele, Firew, 2016. "Rural youth and employment in Ethiopia," ESSP working papers 98, International Food Policy Research Institute (IFPRI).
    17. Newman Carol & Kinghan Christina, 2015. "Economic transformation and the diversification of livelihoods in rural Viet Nam," WIDER Working Paper Series 064, World Institute for Development Economic Research (UNU-WIDER).
    18. Mintewab Bezabih & Andrea Mannberg & Eyerusalem Siba, 2014. "The land certification program and off-farm employment in Ethiopia," GRI Working Papers 168, Grantham Research Institute on Climate Change and the Environment.

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