Drought, Livestock Holding, and Milk Production: A Difference-in-Differences Analysis

Meseret Abebe and Yonas Alem

No 23-12, EfD Discussion Paper from Environment for Development, University of Gothenburg

Abstract: We identify the effects of the 2015-16 El-Niño-induced large-scale drought on smallholder farmers’ livestock holding and milk production. The drought reduced milk production and livestock holding by 28.5% and 8.7%, respectively. Heterogenous impact analysis suggests that asset-rich households sold livestock and financed feed purchases, likely insulating milk production from the drought. In contrast, assetpoor households kept their livestock at all costs and absorbed all the decline in milk production. Our findings have important implications for formulating safety net and adaptation programs targeting smallholder farmers and the livestock sector in a rapidly changing climate.

Keywords: Drought; diff-in-diff; climate change; livestock holding; Ethiopia (search for similar items in EconPapers)
JEL-codes: D13 O13 O44 Q18 Q54 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2023-07-17
New Economics Papers: this item is included in nep-agr, nep-dev and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunefd:2023_012

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