IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Growth and Shocks: evidence from rural Ethiopia

  • Stefan Dercon

    (Centre for the Study of African Economies)

Using panel data from villages in rural Ethiopia, the paper studies the determinants of consumption growth (1989-97), based on a microgrowth model, controlling for heterogeneity. Consumption grew substantially, but with diverse experiences across villages and individuals. A key focus is on whether shocks affect growth. Rainfall shocks have a substantial impact on consumption growth, and its impact presists for many years. There also appears to be a significant, persistent growth impact from the large-scale famine in the 1980s, as well as substantial externalities from the presence of road infrastructure. The findings related to the persistent effects of rainfall shocks and the famine crisis imply that welfare losses due to the lack of insurance and protection measures are well beyond the welfare cost of short term consumption fluctuations.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://econwpa.repec.org/eps/dev/papers/0409/0409036.pdf
Download Restriction: no

Paper provided by EconWPA in its series Development and Comp Systems with number 0409036.

as
in new window

Length: 26 pages
Date of creation: 23 Sep 2004
Date of revision:
Handle: RePEc:wpa:wuwpdc:0409036
Note: Type of Document - pdf; pages: 26
Contact details of provider: Web page: http://econwpa.repec.org

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Jayne, Thomas S. & Strauss, John & Yamano, Takashi & Molla, Daniel, 2002. "Targeting of food aid in rural Ethiopia: chronic need or inertia?," Journal of Development Economics, Elsevier, vol. 68(2), pages 247-288, August.
  2. Abhijit V. Banerjee & Andrew F. Newman, 1990. "Occupational Choice and the Process of Development," Discussion Papers 911, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
  4. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  5. Stefan Dercon & Pramila Krishnan, 2000. "Vulnerability, seasonality and poverty in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 25-53.
  6. Robert M. Townsend, 1995. "Consumption Insurance: An Evaluation of Risk-Bearing Systems in Low-Income Economies," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 83-102, Summer.
  7. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Harvard Institute of Economic Research Working Papers 1727, Harvard - Institute of Economic Research.
  8. Jalan, Jyotsna & Ravallion, Martin, 1996. "Are there dynamic gains from a poor-area development program?," Policy Research Working Paper Series 1695, The World Bank.
  9. Hausman, Jerry A. & Taylor, William E., 1981. "Panel data and unobservable individual effects," Journal of Econometrics, Elsevier, vol. 16(1), pages 155-155, May.
  10. Lipton, Michael & Ravallion, Martin, 1993. "Poverty and policy," Policy Research Working Paper Series 1130, The World Bank.
  11. Pramila Krishnan & Stefan Dercon, 1995. "Income portfolios in rural Ethiopia and Tanzania: choices and constraints," CSAE Working Paper Series 1995-12, Centre for the Study of African Economies, University of Oxford.
  12. Durlauf,S.N. & Quah,D.T., 1998. "The new empirics of economic growth," Working papers 3, Wisconsin Madison - Social Systems.
  13. Acemoglu, Daron & Zilibotti, Fabrizio, 1997. "Was Prometheus Unbound by Chance? Risk, Diversification, and Growth," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 709-51, August.
  14. Campbell, John & Mankiw, Gregory, 1987. "Are Output Fluctuations Transitory?," Scholarly Articles 3122545, Harvard University Department of Economics.
  15. Jalan, Jyotsna & Ravallion, Martin, 2001. "Household income dynamics in rural China," Policy Research Working Paper Series 2706, The World Bank.
  16. Rosenzweig, Mark R. & Binswanger, Hans P., 1992. "Wealth, weather risk, and the composition and profitability of agricultural investments," Policy Research Working Paper Series 1055, The World Bank.
  17. Harold Alderman & Jere R. Behrman & Victor Lavy & Rekha Menon, 2001. "Child Health and School Enrollment: A Longitudinal Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 185-205.
  18. Hoddinott, John & Kinsey, Bill, 2001. " Child Growth in the Time of Drought," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(4), pages 409-36, September.
  19. Rosenzweig, Mark R & Wolpin, Kenneth I, 1993. "Credit Market Constraints, Consumption Smoothing, and the Accumulation of Durable Production Assets in Low-Income Countries: Investment in Bullocks in India," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 223-44, April.
  20. Lokshin, Michael & Ravallion, Martin, 2000. "Short-lived shocks with long-lived impacts? - household income dynamics in a transition economy," Policy Research Working Paper Series 2459, The World Bank.
  21. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  22. Ravallion, Martin & Jalan, Jyotsna, 1996. "Growth divergence due to spatial externalities," Economics Letters, Elsevier, vol. 53(2), pages 227-232, November.
  23. Chris Elbers & Jan Willem Gunning & Bill Kinsey, 2007. "Growth and Risk: Methodology and Micro Evidence," World Bank Economic Review, World Bank Group, vol. 21(1), pages 1-20.
  24. Stefan Dercon & Pramila Krishnan, 2003. "Risk Sharing and Public Transfers," Economic Journal, Royal Economic Society, vol. 113(486), pages C86-C94, March.
  25. Jalan, Jyotsna & Ravallion, Martin, 1997. "Spatial poverty traps?," Policy Research Working Paper Series 1862, The World Bank.
  26. Jyotsna Jalan & Martin Ravallion, 1998. "Geographic Poverty Traps?," Boston University - Institute for Economic Development 86, Boston University, Institute for Economic Development.
  27. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-95, November.
  28. Jan Willem Gunning & John Hoddinott & Bill Kinsey & Trudy Owens, 1999. "Revisiting forever gained: income dynamics in the resettlement areas of Zimbabwe," CSAE Working Paper Series 1999-14, Centre for the Study of African Economies, University of Oxford.
  29. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
  30. Webb, Patrick & von Braun, Joachim & Yohannes, Yisehac, 1992. "Famine in Ethiopia: policy implications of coping failure at national and household levels," Research reports 92, International Food Policy Research Institute (IFPRI).
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpdc:0409036. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.