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Working Paper 236 - Estimating Development Resilience: A Conditional Moments-Based Approach

Christopher Barrett () and Cissé Jennifer Denno ()

Working Paper Series from African Development Bank

Abstract: Despite significant spending on ‘resilience’ by international development agencies, no theory-based method for estimating or measuring development resilience has yet been developed. This paper introduces an econometric strategy for estimating individual or household-level development resilience from panel data. Estimation of multiple conditional moments of a welfare function—itself specified to permit potentially nonlinear path dynamics— enables the computation and forecasting of individual-specific conditional probabilities of satisfying a normative minimum standard of living. We then develop a decomposable resilience measure that enables aggregation of the individualspecific estimates to targetable subpopulation- and population-level measures. We illustrate the method empirically using household panel data from pastoralist communities in northern Kenya. The results demonstrate not only the method and its potential for targeting resiliencebuilding interventions, but also help explain the behavioral paradox of apparent herd overstocking.

Date: 2016-06-05
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