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Hurricane Mitch and consumption growth of Nicaraguan agricultural households

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  • Patrick Premand

Abstract

Risk has been presented as a cause of poverty persistence under imperfect insurance mechanisms. This paper assesses the ex post effect of hurricane Mitch on consumption growth of Nicaraguan agricultural house-holds. How persistent was Mitch's direct impact beyond October 1998 damage? A nationally representative panel is available for 1998 and 2001, but affected households were also re-surveyed in 1999. Given the data design, idiosyncratic and common dimensions of the shock can be disentangled, together with its short and medium-term impacts. Satellite rainfall observations are interpolated at municipal centres to complement survey reports of hurricane-induced losses. Within the treated sample, micro-growth model estimates only point to a limited short-term negative impact of idiosyncratic damage, at most through floods and displacement. Mitch's medium-term common impact is considered in an experimental set-up. Households affected by Mitch do not suffer from lower growth between 1998 and 2001, even accounting for spatial heterogeneity. Overall, hurricane Mitch's direct consumption impact thus exhibits little persistence.

Suggested Citation

  • Patrick Premand, 2008. "Hurricane Mitch and consumption growth of Nicaraguan agricultural households," CSAE Working Paper Series 2008-06, Centre for the Study of African Economies, University of Oxford.
  • Handle: RePEc:csa:wpaper:2008-06
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    File URL: http://www.csae.ox.ac.uk/materials/papers/2008-06text.pdf
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    Cited by:

    1. Kirchberger, Martina, 2017. "Natural disasters and labor markets," Journal of Development Economics, Elsevier, pages 40-58.

    More about this item

    Keywords

    Risk; growth; natural experiment;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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