Income Shocks and Poverty Traps: Asset Smoothing in Rural Ethiopia

Douglas Scott

No 2019-01, Discussion Papers from University of Nottingham, CREDIT

Abstract: Evidence is found of two distinct patterns of response to the onset of the recent drought in rural Ethiopia. Agricultural Households with pre-shock cattle holdings of three or more animals effectively used these assets as a buffer against the fall in agricultural income. In contrast, households with smaller herds preserved their current herd size, at the expense of reduced consumption. These results are consistent with the existence of a poverty trap in household cattle holdings, and highlight the stark choices faced by some groups during this period, to either reduce consumption today or potentially undermine productivity in the future.

Keywords: poverty traps; Ethiopia; drought; asset smoothing (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-agr and nep-dev
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.nottingham.ac.uk/credit/documents/papers/2019/19-01.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:not:notcre:19/01

Access Statistics for this paper

More papers in Discussion Papers from University of Nottingham, CREDIT School of Economics University of Nottingham University Park Nottingham NG7 2RD. Contact information at EDIRC.
Bibliographic data for series maintained by Hilary Hughes (hilary.hughes@nottingham.ac.uk).