Vulnerability to Drought and Food Price Shocks : Evidence from Ethiopia
Although the measurement and determinants of poverty have been widely studied, vulnerability, or the threat of future poverty, has been more difficult to investigate due to data paucity. This paper combines nationally representative household data...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/959471482167974723/Vulnerability-to-drought-and-food-price-shocks-evidence-from-Ethiopia http://hdl.handle.net/10986/25819 |
| Summary: | Although the measurement and
determinants of poverty have been widely studied,
vulnerability, or the threat of future poverty, has been
more difficult to investigate due to data paucity. This
paper combines nationally representative household data with
objective drought and price information to quantify the
causes of vulnerability to poverty in Ethiopia. Previous
estimates have relied on self-reported shocks and variation
in outcomes within a survey, which is inadequate for shocks
such as weather and prices that vary more across time than
space. Historical distributions of climate and price shocks
in each district were used to simulate the probable
distribution of future consumption for individual
households; these were then used to quantify vulnerability
to poverty. The analysis shows that many Ethiopians are
unable to protect their consumption against lack of rainfall
and sudden increases in food prices. A moderate drought
causes a 9 percent reduction in consumption for many rural
households, and high inflation causes a 14 percent reduction
in the consumption of uneducated households in urban areas.
Vulnerability of rural households is considerably higher
than that of urban households, despite realized poverty
rates being fairly similar. This finding reflects that the
household survey in 2011 was conducted during a year of good
rainfall but rapid food price inflation. The results
highlight the need for caution in using a snapshot of
poverty to target programs, as underlying rates of
vulnerability can be quite different from the poverty rate
captured at one point in time. The results also suggest that
significant welfare gains can be made from risk management
in both rural and urban areas. |
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