Estimating Households Vulnerability to Idiosyncratic and Covariate Shocks: A Novel Method Applied in MadagascarIsabel Gunther and Kenneth Harttgen World Development, 2009, vol. 37, issue 7, pages 1222-1234 Abstract: Summary Households in developing countries are frequently hit by severe idiosyncratic and covariate shocks leading to high consumption volatility. A household's currently observed poverty status might therefore not be a good indicator of the household's general vulnerability to poverty. In the recent years, there has been an emerging literature on the concept and empirical analysis of vulnerability. But because of strong data requirements for vulnerability analysis and limited availability of panel and shock data for developing countries, static poverty analysis still dominates empirical vulnerability studies. In this paper, we propose a simple method to empirically assess the impact of idiosyncratic and covariate shocks on households' vulnerability, which can be applied in a wide context as it relies on more commonly available cross-sectional or short panel data. We empirically illustrate our approach for Madagascar. We show that covariate shocks have a relatively higher impact on rural households, whereas idiosyncratic shocks have a relatively higher impact on urban households' vulnerability. Keywords: vulnerability; idiosyncratic; and; covariate; shocks; multilevel; modeling; Madagascar (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:eee:wdevel:v:37:y:2009:i:7:p:1222-1234 Access Statistics for this article World Development is edited by O. T. Coomes More articles in World Development from Elsevier |
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