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Rainfall variability, occupational choice, and welfare in rural Bangladesh

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  • Bandyopadhyay, Sushenjit
  • Skoufias, Emmanuel

Abstract

This study investigates the choice of occupational focus versus diversification between household members in rural Bangladesh as an autonomous and proactive adaptation strategy against ex ante local rainfall variability risks. The analysis combines nationally representative household level survey data with historical climate variability information at the Upazila level. The authors note that flood prone Upazilas may face reduced risks from local rainfall variability as compared with non-flood prone Upazilas. They find that two members of the same household are less likely to be self-employed in agriculture if they live in an area with high local rainfall variability. However, the occupational diversification strategy comes at a cost to households in terms of consumption welfare. The paper considers the effects of three policy actions, providing access to credit, safety net, and market. Access to market appears to be more effective in reducing the likelihood of costly within-household occupational diversification as an ex ante climate risk-reducing strategy as compared with access to credit and safety net.

Suggested Citation

  • Bandyopadhyay, Sushenjit & Skoufias, Emmanuel, 2012. "Rainfall variability, occupational choice, and welfare in rural Bangladesh," Policy Research Working Paper Series 6134, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6134
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    References listed on IDEAS

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    1. Rosenzweig, Mark R & Binswanger, Hans P, 1993. "Wealth, Weather Risk and the Composition and Profitability of Agricultural Investments," Economic Journal, Royal Economic Society, vol. 103(416), pages 56-78, January.
    2. Nidhiya Menon, 2009. "Rainfall Uncertainty and Occupational Choice in Agricultural Households of Rural Nepal," Journal of Development Studies, Taylor & Francis Journals, vol. 45(6), pages 864-888.
    3. Edward C. Norton & Hua Wang & Chunrong Ai, 2004. "Computing interaction effects and standard errors in logit and probit models," Stata Journal, StataCorp LP, vol. 4(2), pages 154-167, June.
    4. Banerjee, Lopamudra, 2007. "Effect of Flood on Agricultural Wages in Bangladesh: An Empirical Analysis," World Development, Elsevier, vol. 35(11), pages 1989-2009, November.
    5. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    6. Nidhiya Menon & Narayanan Subramanian, 2008. "Learning, diversification and the nature of risk," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 35(1), pages 117-145, April.
    7. World Bank, 2008. "Bangladesh - Poverty Assessment for Bangladesh : Creating Opportunities and Bridging the East-West Divide," World Bank Other Operational Studies 6144, The World Bank.
    8. World Bank, 2008. "Bangladesh - Poverty Assessment for Bangladesh : Creating Opportunities and Bridging the East-West Divide," World Bank Other Operational Studies 7886, The World Bank.
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    Citations

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    Cited by:

    1. Azreen Karim & Ilan Noy, 2016. "Poverty And Natural Disasters — A Qualitative Survey Of The Empirical Literature," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(01), pages 1-36, March.
    2. Eskander, Shaikh & Barbier, Edward, 2016. "Adaptation to Natural Disasters Through the Agricultural Land Rental Market: Evidence from Bangladesh," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235648, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Science of Climate Change; Hazard Risk Management; Climate Change Mitigation and Green House Gases; Housing&Human Habitats; Water Conservation;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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