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Optimal Credible Warnings

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Listed:
  • Koffi Akakpo
  • Marie-Amélie Boucher
  • Vincent Boucher

Abstract

We examine the impact of rainfall variability and cyclones on schooling and work among a cohort of teens and young adults by estimating a bivariate probit model, using a panel survey conducted in 2004 and 2011 in MadagascarÑa poor island nation that is frequently affected by extreme weather events. Our results show that negative rainfall deviations and cyclones reduce the current and lagged probability of attending school and encourage young men and, to a greater extent, women to enter the work force. Less wealthy households are most likely to experience this school-to-work transition in the face of rainfall shocks. The finding is consistent with poorer households having less savings and more limited access to credit and insurance, whichreduces their ability to cope with negative weather shocks.

Suggested Citation

  • Koffi Akakpo & Marie-Amélie Boucher & Vincent Boucher, 2018. "Optimal Credible Warnings," Cahiers de recherche CREATE 2018-03, CREATE.
    • Handle: RePEc:lvl:creacr:2018-03
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    References listed on IDEAS

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    More about this item

    Keywords

    Flood warnings; Renewable resource management; Uncertainty;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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