IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

How do rural households respond to economic shocks? Insights from hierarchical analysis using global data

  • Borner, Jan
  • Shively, Gerald E.
  • Wunder, Sven
  • Wyman, Miriam

Unanticipated events can cause considerable economic hardship for poor rural households. Some types of negative shocks, for example weather-related agricultural losses and vector-borne diseases, are expected to occur more frequently as a result of climate change. This paper measures the role of household- and location-specific characteristics in conditioning behavioral responses to idiosyncratic and covariate shocks. We use data from more than 8000 households in 25 developing countries, compiled in the global database of the Poverty Environment Network (PEN). We employ a hierarchical multinomial logit model to identify the importance of characteristics observed at different levels of aggregation on a set of responses to economic shocks. Results indicate that in response to idiosyncratic shocks, households tend to deplete financial and durable assets, whereas covariate shocks predominantly result in reduced consumption. Households in sites characterized by high asset wealth tend to respond to shocks more proactively than in sites with average or below average asset wealth; savings emerge as an important determinant of shock response behavior at the household level. We also find that a higher concentration of land ownership at the village level reduces the prevalence of natural resource-based coping strategies. Overall, rural households are less reliant on natural resource extraction for coping than expected from the case-study literature. Our findings have implications for rural development and climate change adaptation strategies.

If 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.

File URL: http://purl.umn.edu/126143
Download Restriction: no

Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126143.

as
in new window

Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:ags:iaae12:126143
Contact details of provider: Web page: http://www.iaae-agecon.org/
Email:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Zimmerman, Frederick J. & Carter, Michael R., 2003. "Asset smoothing, consumption smoothing and the reproduction of inequality under risk and subsistence constraints," Journal of Development Economics, Elsevier, vol. 71(2), pages 233-260, August.
  2. D. McFadden & J. Hausman, 1981. "Specification Tests for the Multinominal Logit Model," Working papers 292, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Donald Hedeker, . "MIXNO: a computer program for mixed-effects nominal logistic regression," Journal of Statistical Software, American Statistical Association, vol. 4(i05).
  4. Subhrendu K. Pattanayak & Erin O. Sills, 2001. "Do Tropical Forests Provide Natural Insurance? The Microeconomics of Non-Timber Forest Product Collection in the Brazilian Amazon," Land Economics, University of Wisconsin Press, vol. 77(4), pages 595-612.
  5. Giné, Xavier, 2011. "Access to capital in rural Thailand: An estimated model of formal vs. informal credit," Journal of Development Economics, Elsevier, vol. 96(1), pages 16-29, September.
  6. Frank Ellis, 1998. "Household strategies and rural livelihood diversification," Journal of Development Studies, Taylor & Francis Journals, vol. 35(1), pages 1-38.
  7. Rose, Elaina, 2001. "Ex ante and ex post labor supply response to risk in a low-income area," Journal of Development Economics, Elsevier, vol. 64(2), pages 371-388, April.
  8. Ravallion, Martin & Chen, Shaohua & Sangraula, Prem, 2007. "New evidence on the urbanization of global poverty," Policy Research Working Paper Series 4199, The World Bank.
  9. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
  10. Leonardo Grilli & Carla Rampichini, 2007. "A multilevel multinomial logit model for the analysis of graduates’ skills," Statistical Methods and Applications, Springer, vol. 16(3), pages 381-393, November.
  11. Pender, John L., 1996. "Discount rates and credit markets: Theory and evidence from rural india," Journal of Development Economics, Elsevier, vol. 50(2), pages 257-296, August.
  12. Elaina Rose, 1999. "Consumption Smoothing and Excess Female Mortality in Rural India," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 41-49, February.
  13. Fisher, Monica & Shively, Gerald, 2005. "Can Income Programs Reduce Tropical Forest Pressure? Income Shocks and Forest Use in Malawi," World Development, Elsevier, vol. 33(7), pages 1115-1128, July.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ags:iaae12:126143. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.