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How Do Rural Households Cope With Shocks? Evidence from Northeast Thailand

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  • Tongruksawattana, Songporne
  • Waibel, Hermann
  • Schmidt, Erich

Abstract

Rural households in emerging market economies are often vulnerable to poverty due to negative shocks and limited capacity for effective ex-post coping. This study analyses the relationship between shock types and coping decisions of rural households using the panel survey data of some 2,200 households in Northeast Thailand in the context of the DFG Research Unit 756. Empirical observations show that a large share of households suffered shocks mainly related to ecological, economic, health and social aspects. Results from a univariate probit model show that wealth status and shock severity in terms of income and asset losses encourage coping action. Regarding types of coping measure, asking for remittances from migrant household members and relatives, taking on public support programs, reallocating household resources, borrowing from formal and informal sources, using savings and selling assets are dominant. Multivariate probit model elaborates on the effect of shock types, household characteristics and location factors on the choice of coping activity. Overall, the results suggest that shocks experienced by rural households are likely to negatively affect their future welfare and more effective social risk management strategies are needed.

Suggested Citation

  • Tongruksawattana, Songporne & Waibel, Hermann & Schmidt, Erich, 2010. "How Do Rural Households Cope With Shocks? Evidence from Northeast Thailand," Proceedings of the German Development Economics Conference, Hannover 2010 53, Verein für Socialpolitik, Research Committee Development Economics.
  • Handle: RePEc:zbw:gdec10:53
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    Cited by:

    1. Raghbendra Jha & Hari K. Nagarajan & Woojin Kang & Kailash C. Pradhan, 2014. "Panchayats and Household Vulnerability in Rural India," ASARC Working Papers 2014-08, The Australian National University, Australia South Asia Research Centre.
    2. repec:spr:jqecon:v:16:y:2018:i:1:d:10.1007_s40953-017-0073-8 is not listed on IDEAS
    3. Kailash Chandra Pradhan & Shrabani Mukherjee, 2016. "Covariate and Idiosyncratic Shocks and Coping Strategies for Poor and Non-poor Rural Households in India," Working Papers 2016-139, Madras School of Economics,Chennai,India.

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    Keywords

    Keywords: shocks; coping actions; vulnerability to poverty; rural households; Thailand;

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