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The Weakest Link Hypothesis For Adaptive Capacity: An Empirical Test

Author

Listed:
  • Richard S.J. Tol

    (Hamburg University and Centre for Marine and Atmospheric Science, Hamburg, Germany)

  • Gary W. Yohe

    (Economics Department, Wesleyan University)

Abstract

Yohe and Tol (2001) built an indexing method for vulnerability based on the hypothesis that the adaptive capacity for any system facing a vector of external stresses could be explained by the weakest of eight underlying determinants – the so-called “weakest link” hypothesis. Subsequent work supported the hypothesis by analogy from other contexts, but we now offer perhaps the first attempt to explore its validity through empirical means. We estimate a structural form designed to accommodate the full range of possible interactions across determinants. The perfect complement case of the pure “weakest-link” formulation lies on one extreme, and the perfect substitute case where each determinant can compensate for all others at constant rates is the other limiting case. For vulnerability to natural disasters, infant mortality and drinking water treatment, we find qualified support for a modified weakest link hypothesis: the weakest indicator plays an important role, but is not essential because other factors can compensate (with increasing difficulty). For life expectancy, sanitation and nutrition, we find a relationship that is close to linear – the perfect substitute case where the various determinants of adaptive capacity can compensate for each other. Moreover, we find another source of diversity in the assessment of vulnerability, since the factors from which systems draw to create adaptive capacity are different for different risks.

Suggested Citation

  • Richard S.J. Tol & Gary W. Yohe, 2006. "The Weakest Link Hypothesis For Adaptive Capacity: An Empirical Test," Wesleyan Economics Working Papers 2006-005, Wesleyan University, Department of Economics.
  • Handle: RePEc:wes:weswpa:2006-005
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    File URL: http://repec.wesleyan.edu/pdf/gyohe/2006005_yohe.pdf
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    References listed on IDEAS

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    1. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    2. repec:rus:hseeco:70719 is not listed on IDEAS
    3. Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September.
    4. Gary W. Yohe & Richard S.J. Tol, 2001. "Indicators for Social and Economic Coping Capacity – Moving Toward at Working Definition of Adaptive Capacity," Working Papers FNU-8, Research unit Sustainability and Global Change, Hamburg University, revised Jun 2001.
    5. Scott Rozelle & Johan F.M. Swinnen, 2004. "Success and Failure of Reform: Insights from the Transition of Agriculture," Journal of Economic Literature, American Economic Association, vol. 42(2), pages 404-456, June.
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    Cited by:

    1. Zoltán J. Ács & Erkko Autio & László Szerb, 2015. "National Systems of Entrepreneurship: Measurement issues and policy implications," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 28, pages 523-541, Edward Elgar Publishing.
    2. Tol, Richard S.J. & Ebi, Kristie L. & Yohe, Gary W., 2007. "Infectious disease, development, and climate change: a scenario analysis," Environment and Development Economics, Cambridge University Press, vol. 12(5), pages 687-706, October.
    3. J. Gupta & E. Bergsma & C. J. A. M. Termeer & G. R. Biesbroek & M. Brink & P. Jong & J. E. M. Klostermann & S. Meijerink & S. Nooteboom, 2016. "The adaptive capacity of institutions in the spatial planning, water, agriculture and nature sectors in the Netherlands," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 21(6), pages 883-903, August.
    4. Richard S. J. Tol, 2009. "The Economic Effects of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 29-51, Spring.

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    More about this item

    Keywords

    Adaptive capacity; vulnerability; weakest-link hypothesis; substitution;
    All these keywords.

    JEL classification:

    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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