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The impact of changing rainfall variability on resource-dependent wealth dynamics

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  • Barrett, Christopher B.
  • Santos, Paulo
Abstract
Climate change is widely expected to lead to changing rainfall variability and thus to changing frequency of drought. In places where drought is a major driver of agroecosystem dynamics, as in the extensive livestock grazing systems that dominate Africa's sprawling arid and semi-arid lands, changing rainfall variability can fundamentally alter human wealth dynamics. We use subjective livestock herd growth expectations data elicited from Boran pastoralists in southern Ethiopia to generate estimates of herd dynamics conditional on rainfall state. The climate state-conditional estimates permit simulation of herd dynamics under different rainfall patterns. The multiple herd size equilibria observed in multiple pastoralist household data sets from the region appear sensitive to climate regimes. Reduced rainfall variability that significantly reduces drought frequency would eliminate, in expectation, the poverty trap equilibrium that presently exists only for households with herd sizes beneath a threshold level. Conversely, if the drought frequency more than doubles relative to recent patterns, then the whole system becomes a poverty trap, in expectation.

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  • Barrett, Christopher B. & Santos, Paulo, 2014. "The impact of changing rainfall variability on resource-dependent wealth dynamics," Ecological Economics, Elsevier, vol. 105(C), pages 48-54.
    • Handle: RePEc:eee:ecolec:v:105:y:2014:i:c:p:48-54
    DOI: 10.1016/j.ecolecon.2014.05.009
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    4. Takahashi, Kazushi & Ikegami, Munenobu & Sheahan, Megan & Barrett, Christopher B., 2014. "Quasi-experimental evidence on the drivers of index-based livestock insurance demand in Southern Ethiopia," IDE Discussion Papers 480, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. Paulo Santos & Christopher B. Barrett, 2017. "Heterogeneous Wealth Dynamics: On the Roles of Risk and Ability," NBER Chapters, in: The Economics of Poverty Traps, pages 265-290, National Bureau of Economic Research, Inc.
    6. Vilas J. Gobin & Paulo Santos & Russell Toth, 2016. "Poverty graduation with cash transfers: a randomized evaluation," Monash Economics Working Papers 23-16, Monash University, Department of Economics.
    7. Lampe, Immanuel & Würtenberger, Daniel, 2020. "Loss aversion and the demand for index insurance," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 678-693.
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    13. Takahashi, Kazushi & Ikegami, Munenobu & Sheahan, Megan & Barrett, Christopher B., 2016. "Experimental Evidence on the Drivers of Index-Based Livestock Insurance Demand in Southern Ethiopia," World Development, Elsevier, vol. 78(C), pages 324-340.
    14. Will, Meike & Groeneveld, Jürgen & Lenel, Friederike & Frank, Karin & Müller, Birgit, 2023. "Determinants of Household Vulnerability in Networks with Formal Insurance and Informal Risk-Sharing," Ecological Economics, Elsevier, vol. 212(C).
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    16. Immanuel Lampe & Daniel Würtenberger, 2019. "Loss Aversion And The Demand For Index Insurance," Working Papers on Finance 1907, University of St. Gallen, School of Finance.
    17. Dougherty, John P. & Flatnes, Jon Einar & Gallenstein, Richard A. & Miranda, Mario J. & Sam, Abdoul G., 2020. "Climate change and index insurance demand: Evidence from a framed field experiment in Tanzania," Journal of Economic Behavior & Organization, Elsevier, vol. 175(C), pages 155-184.
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    19. Christopher B. Barrett, 2021. "Overcoming Global Food Security Challenges through Science and Solidarity," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 422-447, March.
    20. Borgomeo, Edoardo & Vadheim, Bryan & Woldeyes, Firew B. & Alamirew, Tena & Tamru, Seneshaw & Charles, Katrina J. & Kebede, Seifu & Walker, Oliver, 2018. "The Distributional and Multi-Sectoral Impacts of Rainfall Shocks: Evidence From Computable General Equilibrium Modelling for the Awash Basin, Ethiopia," Ecological Economics, Elsevier, vol. 146(C), pages 621-632.
    21. Ana Maria Loboguerrero & Bruce M. Campbell & Peter J. M. Cooper & James W. Hansen & Todd Rosenstock & Eva Wollenberg, 2019. "Food and Earth Systems: Priorities for Climate Change Adaptation and Mitigation for Agriculture and Food Systems," Sustainability, MDPI, vol. 11(5), pages 1-26, March.
    22. Dougherty, John & Flatnes, Jon Einar & Gallenstein, Richard & Miranda, Mario J. & Sam, Abdoul G., 2017. "Investigating the Impact of Climate Change on the Demand for Index Insurance," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258524, Agricultural and Applied Economics Association.

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