Shocks, Consumption and Income Diversification in Rural Ethiopia

Porter, C. (2012) Shocks, Consumption and Income Diversification in Rural Ethiopia. Journal of Development Studies, 48 (9). pp. 1209-1222. ISSN 0022-0388

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We present new evidence that households are unable to protect themselves from rainfall failure that occurs on average every five years in rural Ethiopia. However, other less extreme rainfall variation and idiosyncratic shocks such as illness and crop pests do not impact significantly on consumption. Agricultural shocks impact negatively on farm income as expected, however they also stimulate non-agricultural earnings by an equivalent amount. In the case of a covariate shock such as severe rainfall failure, this smoothing mechanism may be ineffective and rainfall insurance or drought-triggered safety nets could provide further protection. © 2012 Copyright Taylor and Francis Group, LLC.

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Journal of Development Studies
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06 Aug 2019 09:40
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21 Sep 2023 02:40