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Gauging the welfare effects of shocks in rural Tanzania

Author

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  • Christiaensen, Luc
  • Hoffmann, Vivian
  • Sarris, Alexander

Abstract

Studies of risk and its consequences tend to focus on one risk factor, such as a drought or an economic crisis. Yet 2003 household surveys in rural Kilimanjaro and Ruvuma, two cash-crop-growing regions in Tanzania that experienced a precipitous coffee price decline around the turn of the millennium, identified health and drought shocks as well as commodity price declines as major risk factors, suggesting the need for a comprehensive approach to analyzing household vulnerability. In fact, most coffee growers, except the smaller ones in Kilimanjaro, weathered the coffee price declines rather well, at least to the point of not being worse off than non-coffee growers. Conversely, improving health conditions and reducing the effect of droughts emerge as critical to reduce vulnerability. One-third of the rural households in Kilimanjaro experienced a drought or health shocks, resulting in an estimated 8 percent welfare loss on average, after using savings and aid. Rainfall is more reliable in Ruvuma, and drought there did not affect welfare. Surprisingly, neither did health shocks, plausibly because of lower medical expenditures given limited health care provisions.

Suggested Citation

  • Christiaensen, Luc & Hoffmann, Vivian & Sarris, Alexander, 2007. "Gauging the welfare effects of shocks in rural Tanzania," Policy Research Working Paper Series 4406, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4406
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    References listed on IDEAS

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    Cited by:

    1. Gaurav, Sarthak, 2015. "Are Rainfed Agricultural Households Insured? Evidence from Five Villages in Vidarbha, India," World Development, Elsevier, vol. 66(C), pages 719-736.
    2. Kathleen Beegle & Joachim De Weerdt & Stefan Dercon, 2008. "Adult Mortality and Consumption Growth in the Age of HIV/AIDS," Economic Development and Cultural Change, University of Chicago Press, vol. 56, pages 299-326.
    3. Martine AUDIBERT, 2008. "Endemic diseases and agricultural productivity: Challenges and policy response," Working Papers 200823, CERDI.
    4. Adam Wagstaff & Magnus Lindelow, 2014. "Are Health Shocks Different? Evidence From A Multishock Survey In Laos," Health Economics, John Wiley & Sons, Ltd., vol. 23(6), pages 706-718, June.
    5. Lars Osberg & Andrew Sharpe, 2014. "Measuring Economic Insecurity in Rich and Poor Nations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 53-76, May.
    6. Lars Osberg, 2010. "Measuring Economic Insecurity and Vulerability as Part of Economic Well-Being: Concepts and Context," Department of Economics at Dalhousie University working papers archive osberg_measuring_economic, Dalhousie, Department of Economics.
    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. George Rapsomanikis & Alexander Sarris, 2008. "Market Integration and Uncertainty: The Impact of Domestic and International Commodity Price Variability on Rural Household Income and Welfare in Ghana and Peru," Journal of Development Studies, Taylor & Francis Journals, vol. 44(9), pages 1354-1381.
    9. Jean-Pierre Tranchant & Patricia Justino & Cathérine Müller, 2014. "Political Violence, Drought and Child Malnutrition: Empirical Evidence from Andhra Pradesh, India," HiCN Working Papers 173, Households in Conflict Network.

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    Keywords

    Health Monitoring&Evaluation; Crops&Crop Management Systems; Access to Finance; Rural Poverty Reduction;

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