Weather Shocks, Coping Strategies and Consumption Dynamics in Rural Ethiopia

Abstract

Household panel data is used to estimate the impact of weather shocks on consumption in rural Ethiopia, along with the effectiveness of household coping strategies in ameliorating the impact of shocks. Results show that changes in rainfall levels are positively associated with per adult equivalent consumption, while high temperature is associated with lower consumption. In terms of household coping strategies, public transfers mitigate the impact of against adverse rainfall shocks on consumption, and off-farm employment mitigate the impact of high temperature shocks. However, urban migration and transfers from former household members or informal social safety nets do not mitigate adverse weather shock.