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Shocks, Sensitivity and Resilience: Tracking the Economic Impacts of Environmental Disaster on Assets in Ethiopia and Honduras

  • Michael Carter

    (University of Wisconsin)

  • Peter Little

    (University of Kentucky)

  • Tewodaj Mogues

    (International Food Policy Research Institute)

  • Workneh Negatu

    (Addis Abeba University)

Droughts, hurricanes and other environmental shocks punctuate the lives of poor and vulnerable populations in many parts of the world. The direct impacts can be horrific, but what are the longer-term effects of such shocks on households and their livelihoods? Under what circumstances, and for what types of households, will shocks push households into poverty traps from which recovery is not possible? In an effort to answer these questions, this paper analyzes the asset dynamics of Ethiopian and Honduran households in the wake of severe environmental shocks. While the patterns are different across countries, both reveal worlds in which the poorest households struggle most with shocks, adopting coping strategies which are costly in terms of both short term and long term well-being. There is some evidence that shocks threaten long term poverty traps and that they tend to militate against any tendency of the poor to catch up with wealthier households. Policy implications are discussed in terms of access to markets and the design of government safety net programs.

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File URL: http://econwpa.repec.org/eps/dev/papers/0511/0511029.pdf
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Paper provided by EconWPA in its series Development and Comp Systems with number 0511029.

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Length: 39 pages
Date of creation: 29 Nov 2005
Date of revision:
Handle: RePEc:wpa:wuwpdc:0511029
Note: Type of Document - pdf; pages: 39
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Zimmerman, Frederick J. & Carter, Michael R., 2003. "Asset smoothing, consumption smoothing and the reproduction of inequality under risk and subsistence constraints," Journal of Development Economics, Elsevier, vol. 71(2), pages 233-260, August.
  2. Valdes, Alberto & Lopez, Ramon E., 1999. "Fighting Rural Poverty In Latin America: New Evidence And Policy," 1999 Annual meeting, August 8-11, Nashville, TN 21581, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Dercon, Stefan, 1998. "Wealth, risk and activity choice: cattle in Western Tanzania," Journal of Development Economics, Elsevier, vol. 55(1), pages 1-42, February.
  4. Quisumbing, Agnes R., 2003. "Food aid and child nutrition in rural Ethiopia," FCND discussion papers 158, International Food Policy Research Institute (IFPRI).
  5. Mogues, Tewodaj & Carter, Michael, 2005. "Social capital and the reproduction of economic inequality in polarized societies," DSGD discussion papers 25, International Food Policy Research Institute (IFPRI).
  6. Tewodaj Mogues, 2005. "Shocks, Livestock Asset Dynamics, and Social Capital in Ethiopia," Development and Comp Systems 0512006, EconWPA.
  7. Mogues, Tewodaj & Carter, Michael R., 2004. "Social Capital and the Reproduction of Inequality in Socially Polarized Economies," Staff Paper Series 476, University of Wisconsin, Agricultural and Applied Economics.
  8. Peter Little & M. Priscilla Stone & Tewodaj Mogues & A. Peter Castro & Workneh Negatu, 2006. "'Moving in place': Drought and poverty dynamics in South Wollo, Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 200-225.
  9. Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, vol. 55(2), pages 273-305, April.
  10. Boucher, Stephen R. & Barham, Bradford L. & Carter, Michael R., 2005. "The Impact of "Market-Friendly" Reforms on Credit and Land Markets in Honduras and Nicaragua," World Development, Elsevier, vol. 33(1), pages 107-128, January.
  11. Morris, Saul S. & Neidecker-Gonzales, Oscar & Carletto, Calogero & Munguia, Marcial & Medina, Juan Manuel & Wodon, Quentin, 2002. "Hurricane Mitch and the Livelihoods of the Rural Poor in Honduras," World Development, Elsevier, vol. 30(1), pages 49-60, January.
  12. Michael Carter & Christopher Barrett, 2006. "The economics of poverty traps and persistent poverty: An asset-based approach," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 178-199.
  13. John Hoddinott, 2006. "Shocks and their consequences across and within households in Rural Zimbabwe," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 301-321.
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