Vulnerability of Household Consumption to Village-level Aggregate Shocks in a Developing Country

Takashi Kurosaki

No 290609, 2011 ASAE 7th International Conference, October 13-15, Hanoi, Vietnam from Asian Society of Agricultural Economists (ASAE)

Abstract: This paper examines which households are more vulnerable when a village is hit by natural disasters. We propose a methodology to infer the theoretical mechanisms underlying the heterogeneity of household vulnerability, focusing on the difference between the across-household-type difference in marginal response to aggregate shocks and that in marginal response to idiosyncratic shocks. Empirical results using two-period panel data from rural Pakistan show that the sensitivity of consumption changes to shocks indeed differs across household types and the patterns of difference can be explained by the coexistence of unequal access to credit and risk sharing among heterogeneously risk-averse households.

Keywords: Consumer/Household Economics; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 20
Date: 2011-10-13
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:asae11:290609

DOI: 10.22004/ag.econ.290609

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