Location of Repository

How Do Rural Households Cope With Shocks? Evidence from Northeast Thailand

By Songporne Tongruksawattana, Hermann Waibel and Erich Schmidt

Abstract

Rural households in emerging market economies are often vulnerable to poverty due to negative shocks and limited capacity for effective ex-post coping. This study analyses the relationship between shock types and coping decisions of rural households using the panel survey data of some 2,200 households in Northeast Thailand in the context of the DFG Research Unit 756. Empirical observations show that a large share of households suffered shocks mainly related to ecological, economic, health and social aspects. Results from a univariate probit model show that wealth status and shock severity in terms of income and asset losses encourage coping action. Regarding types of coping measure, asking for remittances from migrant household members and relatives, taking on public support programs, reallocating household resources, borrowing from formal and informal sources, using savings and selling assets are dominant. Multivariate probit model elaborates on the effect of shock types, household characteristics and location factors on the choice of coping activity. Overall, the results suggest that shocks experienced by rural households are likely to negatively affect their future welfare and more effective social risk management strategies are needed. --Keywords: shocks,coping actions,vulnerability to poverty,rural households,Thailand

OAI identifier:

Suggested articles

Preview

Citations

  1. (2007). Coping with Drought in Rice Farming in Asia: Insights from a Cross-country Comparative Study.
  2. (1988). Coping with the Market: Uncertainty and Food Security Among Hausa Peasants.
  3. (1992). Do the Poor Insurance? A Synthesis of the Literature on Risk and Consumption in Developing Countries. World Bank Policy Research Working Paper Series No. 1008, World Bank,
  4. (2003). Econometric Analysis.
  5. (1998). Econometric Models and Economic Forecasts,
  6. (1995). Explaining Household Vulnerability to Idiosyncratic Income Shocks.
  7. (2007). Fate and Fear: Risk and Its Consequences in Africa. Oxford: Oxford University. Paper prepared for the African Economic Research Consortium.
  8. (2002). Income Risk, Coping Strategies, and Safety Nets. World Bank Research Observer.
  9. (2009). Income Shocks, Coping Strategies, and Consumption Smoothing. An Application to Indonesian Data.
  10. (1992). Indicators and Data Collection Methods for Assessing Household Food Security. In: Household Food Security: Concepts, Indicators, Measurements. A Technical Review,
  11. (2008). Key Indicators for Asia and the Pacific. Asian Development Bank.
  12. (1999). Limited-Dependent and Qualitative VarIables in Econometrics.
  13. (2006). Livelihood Shocks and Coping Strategies: An Empirical Study of Bangladesh Households. Paper prepared for presentation at the American Agricultural Economics Association Annual Meeting,
  14. (2003). Multivariate Probit Regression Using Simulated Maximum Likelihood.
  15. (2006). Nonfarm Employment, Agricultural Shocks, and Poverty Dynamics: Evidence from Rural Uganda.
  16. (1974). On a General Computer Algorithm for the Analysis of Models with Limited Dependent Variables.
  17. (2007). Sampling for Vulnerability to Poverty: Cost Effectiveness Versus Precision. In: Tielkes, Eric (ed): Tropentag
  18. (2006). Shocks and Their Consequences Across and Within Households in Rural Zimbabwe.
  19. (2009). Shocks, Coping, and Outcomes for Pakistan’s Poor: Health Risks Predominate.
  20. (1983). Silent Violence: Food, Famine and Peasantry in
  21. (1999). Smoothing Consumption by Smoothing Income: Hours-of-Work Responses to Idiosyncratic agricultural Shocks in Rural India.
  22. (2010). Smoothing Income against Crop Flood Losses in Amazonia: Rain Forest or Rivers as a Safety Net?
  23. (2002). Social capital and coping with economic shocks. FCND discussion papers 142,
  24. (2005). The Persistence of Income Shocks: Evidence from Rural Indonesia.
  25. (1986). The Response to Drought of Beja Famine Refugees in Sudan.
  26. (1977). The Structure of Random Utility Models. Theory and Decision.
  27. (2008). Understanding Vulnerability to Poverty of Rural Agricultural Households in Northeastern Thailand. Tropentag, Hohenheim,
  28. (1970). Utility Theory for Decision Making.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.