Distributional Impact Analysis of Past Climate Variability in Rural Indonesia

Distributional Impact Analysis of Past Climate Variability in Rural Indonesia

In rural Indonesia, around 60 percent of workers engage in agriculture and face regular climatic shocks that may threaten their crop production, household income, and human capital investments. Little is known about households ability to maintain...

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Bibliographic Details
Main Authors:	Korkeala, Outi, Newhouse, David, Duarte, Mafalda
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTIVITY AGRICULTURAL REVENUE AGRICULTURAL SECTOR AGRICULTURAL WAGES ARID TROPICS ASSET HOLDINGS AVERAGE PER CAPITA CONSUMPTION CAPITA EXPENDITURE CHILD LABOUR CLIMATE CHANGE CLIMATIC CHANGE COMMUNITY LEVEL CONSUMERS CONSUMPTION BEHAVIOR CONSUMPTION MEASURE CONSUMPTION QUINTILES CONSUMPTION SMOOTHING CREDIT MARKETS CROP PRODUCTION CROP YIELD DEVELOPMENT ECONOMICS DISTRICT-LEVEL DROUGHT DRY SEASON ECONOMIC PERSPECTIVES ECONOMIC SHOCKS FARM HOUSEHOLDS FARMERS FARMLAND FOOD AVAILABILITY FOOD ITEMS FOOD PRICES FOOD SECURITY HOUSEHOLD CHARACTERISTICS HOUSEHOLD CONSUMPTION HOUSEHOLD CONTROLS HOUSEHOLD EXPENDITURE HOUSEHOLD HEAD HOUSEHOLD INCOME HOUSEHOLD MEMBERS HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD WELFARE HOUSEHOLD-LEVEL HUMAN CAPITAL INCOME DATA INCOME SHOCKS INCOME SMOOTHING INFORMAL INSURANCE INSURANCE MARKETS IRRIGATION PER CAPITA CONSUMPTION POOR POOR HOUSEHOLD POOR HOUSEHOLDS POOR PEOPLE POOR RURAL AREAS POOR RURAL HOUSEHOLDS POVERTY REDUCTION REAL PER CAPITA CONSUMPTION REDUCTION IN CONSUMPTION REGIONAL VARIATIONS RURAL RURAL AREAS RURAL CREDIT RURAL EMPLOYMENT RURAL FARM RURAL FARMERS RURAL HOUSEHOLD RURAL HOUSEHOLDS RURAL PRICES RURAL WAGES RURAL WORKERS SAVINGS SCHOOL ATTENDANCE SCHOOLING STANDARD DEVIATION STANDARD ERRORS STATISTICAL SIGNIFICANCE SWEET POTATO TOTAL CONSUMPTION TOTAL EXPENDITURE
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091007100749 http://hdl.handle.net/10986/4261

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Summary:	In rural Indonesia, around 60 percent of workers engage in agriculture and face regular climatic shocks that may threaten their crop production, household income, and human capital investments. Little is known about households ability to maintain consumption in response to these shocks. This paper uses both longitudinal and repeated cross-sectional data to examine the extent to which farm profits and household consumption are reduced by delayed monsoon onset, an important determinant of rice production in Indonesia. It also investigates whether poor households are more vulnerable to delayed onset. Overall, delayed onset has minor effects on rural households profit and consumption. For poor households, defined as those with average per capita consumption in the lowest quintile, delayed onset the previous year is associated with a 13 percent decline in per capita consumption. Most of this decline is due to an increase in household size, however, and delayed onset two years ago is positively correlated with consumption. The findings suggest that poor households experience greater volatility but no lasting reduction in consumption following delayed monsoon onset.