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Covariate and Idiosyncratic Shocks and Coping Strategies for Poor and Non-poor Rural Households in India

Kailash Pradhan () and Shrabani Mukherjee ()

Working Papers from Madras School of Economics,Chennai,India

Abstract: A probit analysis estimates the relationship between different shocks and their corresponding choices of coping actions for poor and non-poor rural households using data set from Additional Rural Incomes Survey/Rural Economic and Demographic Survey (ARIS/REDS) surveys of National Council of Applied Economic Research (NCAER) from rural India across 17 states. Both poor and non-poor households experience the covariate and idiosyncratic shocks and take the coping strategies differently. Regarding types of coping measure, asking for remittances from relatives, taking on public support programs, reallocating household resources, borrowing from formal and informal sources, using savings and selling assets are dominant. Extremely poor starve to mange distress of sudden shocks. Local governance and welfare programs provided by Rural Local Bodies fail to control the starving for poor households during the idiosyncratic shocks. Households’ education plays significant role in adopting appropriate coping strategies depending on nature of shocks. Repeated sequence of same kind of shocks brings out the scope of chronic poverty and vulnerability.

Keywords: Rural Households; Shocks; Coping Strategies; Poverty; Probit ModelClassification-JEL: D10; D81; I30 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2016-02
New Economics Papers: this item is included in nep-dev
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Journal Article: Covariate and Idiosyncratic Shocks and Coping Strategies for Poor and Non-poor Rural Households in India (2018) Downloads
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