Do economic crises lead to health and nutrition behavior responses?: analysis using longitudinal data from Russia

Using longitudinal data on more than 2,000 Russian families spanning the period between 2007 and 2010, this paper estimates the impact of the 2009 global financial crisis on food expenditures, health care expenditures, and doctor visits in Russia. The primary estimation strategy adopted is the semi-parametric difference-in-difference with propensity score matching technique. The analysis finds that household health and nutritional behavior indicators do not vary statistically between households that were crisis-affected and households that were not affected by the crisis. However the analysis finds that crisis-affected poor families curtailed their out-of-pocket health expenditures during and after the crisis more than poor families that were not affected by the crisis did. In addition, crisis-affected vulnerable groups changed their health behavior. In particular, households with low educational attainment of household heads and households with more elderly people changed their health and nutrition behavior response when affected by the crisis. The results are invariant to the propensity score matching techniques and parametric fixed effects estimation models

Who Benefits from Increased Access to Public Services at the Local Level? A Marginal Benefit Incidence Analysis for Education and Basic Infrastructure

Do poor people benefit more or less than the nonpoor from an expansion in access to public services? And do those benefits depend on the existing level of access? Answering these questions is essential to strategies for empowering (or “investing in”) poor people, but the lack of panel data or repeated crosssectional data in poor countries has often made it impossible. This paper proposes a methodology for answering these questions using data from only a single cross-section survey. We argue that the methodology may be useful for monitoring the allocation of public expenditures in a context of decentralization, and we demonstrate this by applying it to local-level data from Bolivia and Paraguay. The results indicate that the marginal benefit incidence is higher (or at least not systematically lower) for the poor than for the nonpoor in education, but this is not the case for many basic infrastructure services. More generally, the poor seem to gain access only once the nonpoor already have high levels of access. This suggests that pro-poor policies must be implemented if the poor are to reap the benefits of gains in access faster.Benefit incidence analysis; education; basic infrastructure

Income shocks reduce human capital investments : evidence from five east European countries

This paper empirically investigates whether households affected by income shocks cope by reducing human capital investments. The analysis uses Crisis Response Surveys conducted in Armenia, Bulgaria, Montenegro, Romania, and Turkey during 2009 and 2010. A propensity score matching technique is adopted to compare health and education investment decisions among households that were affected by income shocks to the matched comparison group. The authors find that households affected by income shocks reduced some human capital investments. Interestingly, households in these five countries were more likely to adopt health-related coping strategies as opposed to education-related coping strategies. The results from Armenia, Bulgaria, Montenegro, and Turkey show that households affected by income shocks reduced their visits to doctors and reduced their spending on medicine and medical care significantly more than the matched comparison group. Households affected by income shocks reduced their education investments, but did not adopt harmful education-related coping strategies, such as withdrawing children from schools or moving children from costly private to cheaper public schools. These findings reveal that long-term and possibly intergenerational household welfare could be affected by short-run income shocks and hence underscore the need for governments to employ mitigation measures.Health Monitoring&Evaluation,Health Systems Development&Reform,Labor Policies,Inequality,Debt Markets

Detecting price links in the world cotton market

The authors examine the degree to which international cotton prices are linked and test whether such links have improved over the past decade. They conclude that the degree of linkage has improved over the past decade, in the short run largely as the result of short-run price transmission -- and to a lesser extent because of long-run comovement. Improvements in information technology have made it much easier for information about demand to be disseminated across markets, so changes in cotton prices attributable to a price shock in one place are soon transmitted to prices in other places. Moreover, many countries have liberalized their cotton subsectors, and in some countries the government's role has changed substantially. In East Africa, for example, cotton marketing and trade was handled entirely by government parastatals. Now Tanzania, Uganda, and Zimbabwe have liberalized their marketing and trade regimes, to varying degrees. In the former Soviet Union (FSU) cotton shipped from Central Asia to other parts of the FSU were considered part of domestic trade. Now cotton exports from Uzbekistan are the most important component of that country's foreign trade. With such changes, one should expect cotton prices to converge somewhat more in the long run. Price links between West Africa and Central Asia are much greater than between the United States and other markets -- in part because most West African and Central Asian cotton is exported, compared with only 40 percent of U.S. cotton (and 60 percent of Greek cotton). Prices in countries that export most of their cotton are more likely to converge than prices in countries where prices are subject to both domestic and international demand conditions. To improve price risk management, there should be future contracts other than those traded on the New York Cotton Exchange, which mostly serves domestic U.S. needs and is not used extensively by non-U.S. hedgers and speculators.Economic Theory&Research,Markets and Market Access,Environmental Economics&Policies,Payment Systems&Infrastructure,General Technology,Markets and Market Access,Environmental Economics&Policies,Economic Theory&Research,General Technology,Access to Markets

Lifeline or Means-Testing? Electric Utility Subsidies in Honduras

Many countries around the world have implemented subsidies for utility consumption, especially in the case of water and electricity. Most subsidies take the form of a lifeline or increasing block tariff, whereby households that consume less pay less on a unit basis. The idea is that households with low consumption levels are likely to be poor, and some intervention is warranted to enable them to meet their basic needs (the lifeline) at an affordable cost. Whether such subsidies are successful at helping the poor is not clear. In this chapter we assess the targeting performance of a similar subsidy for electricity implemented in Honduras. The subsidy is targeted through the lifeline principle; however, because the consumption threshold for eligibility is relatively high (300 kWh per month), and because those with access to electricity tend to be less poor than those without access, the program’s overall performance is low in terms of poverty reduction. Targeting through means-testing rather than a lifeline, or at least a lower threshold for the lifeline, could help improve the impact of the subsidy, and based on experience in other countries, would not necessarily imply high administrative costs.Electricity subsidies; ROC curves; targeting

Who Benefits from Increased Access to Public Services at the Local Level? A Marginal Benefit Incidence Analysis for Education and Basic Infrastructure

Do poor people benefit more or less than the nonpoor from an expansion in access to public services? And do those benefits depend on the existing level of access? Answering these questions is essential to strategies for empowering (or “investing in”) poor people, but the lack of panel data or repeated crosssectional data in poor countries has often made it impossible. This paper proposes a methodology for answering these questions using data from only a single cross-section survey. We argue that the methodology may be useful for monitoring the allocation of public expenditures in a context of decentralization, and we demonstrate this by applying it to local-level data from Bolivia and Paraguay. The results indicate that the marginal benefit incidence is higher (or at least not systematically lower) for the poor than for the nonpoor in education, but this is not the case for many basic infrastructure services. More generally, the poor seem to gain access only once the nonpoor already have high levels of access. This suggests that pro-poor policies must be implemented if the poor are to reap the benefits of gains in access faster

Cross-sectional analyses of climate change impacts

The authors explore the use of cross-sectional analysis to measure the impacts of climate change on agriculture. The impact literature, using experiments on crops in laboratory settings combined with simulation models, suggests that agriculture will be strongly affected by climate change. The extent of these effects varies by country and region. Therefore, local experiments are needed for policy purposes, which becomes expensive and difficult to implement for most developing countries. The cross-sectional technique, as an alternative approach, examines farm performance across a broad range of climates. By seeing how farm performance changes with climate, one can estimate long-run impacts. The advantage of this approach is that it fully captures adaptation as each farmer adapts to the climate they have lived in. The technique measures the full net cost of climate change, including the costs as well as the benefits of adaptation. However, the technique is not concern-free. The four chapters in this paper examine important potential concerns of the cross-sectional method and how they could be addressed, especially in developing countries. Data availability is a major concern in developing countries. The first chapter looks at whether estimating impacts using individual farm data can substitute using agricultural census data at the district level that is more difficult to obtain in developing countries. The study, conducted in Sri Lanka, finds that the individual farm data from surveys are ideal for cross-sectional analysis. Another anticipated problem with applying the cross-sectionalapproach to developing countries is the absence of weather stations, or discontinued weather data sets. Further, weather stations tend to be concentrated in urban settings. Measures of climate across the landscape, especially where farms are located, are difficult to acquire. The second chapter compares the use of satellite data with ground weather stations. Analyzing these two sources of information, the study reveals that satellite data can explain more of the observed variation in farm performance than ground station data. Because satellite data are readily available for the entire planet, the availability of climate data will not be a constraint. A continuing debate is whether farm performance depends on just climate normals-the average weather over a long period of time-or on climate variance (variations away from the climate normal). Chapter 3 reveals that climate normals and climate variance are highly correlated. By adding climate variance, the studies can begin to measure the importance of weather extremes as well as normals. A host of studies have revealed that climate affects agricultural performance. Since agriculture is a primary source of income in rural areas, it follows that climate might explain variations in rural income. This is tested in the analysis in Chapter 4 and shown to be the case. The analysis reveals that local people in rural areas could be heavily affected by climate change even in circumstances when the aggregate agricultural sector in the country does fine.Climate Change,Environmental Economics&Policies,Wetlands,Global Environment Facility,Montreal Protocol,Environmental Economics&Policies,Climate Change,Wetlands,Global Environment Facility,Montreal Protocol

Who Benefits from Increased Access to Public Services at the Local Level? A Marginal Benefit Incidence Analysis for Education and Basic Infrastructure

Do poor people benefit more or less than the nonpoor from an expansion in access to public services? And do those benefits depend on the existing level of access? Answering these questions is essential to strategies for empowering (or “investing in”) poor people, but the lack of panel data or repeated crosssectional data in poor countries has often made it impossible. This paper proposes a methodology for answering these questions using data from only a single cross-section survey. We argue that the methodology may be useful for monitoring the allocation of public expenditures in a context of decentralization, and we demonstrate this by applying it to local-level data from Bolivia and Paraguay. The results indicate that the marginal benefit incidence is higher (or at least not systematically lower) for the poor than for the nonpoor in education, but this is not the case for many basic infrastructure services. More generally, the poor seem to gain access only once the nonpoor already have high levels of access. This suggests that pro-poor policies must be implemented if the poor are to reap the benefits of gains in access faster

Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia

This note details simulations of the distributional impacts of the 2009 financial crisis on households in Latvia. It uses household survey data collected prior to the crisis and simulates the impact of the growth slowdown. The simulations show that Latvia experienced a sharp rise in poverty, widening of the poverty gap, and a rise in income inequality due to the economic contraction in 2009. The 18 percent contraction in gross domestic product (affecting mainly trade hotels and restaurants, construction, and manufacturing) likely led the poverty head count to increase from 14.4 percent in 2008 to 20.2 percent in 2009. The poverty gap, which measures the national poverty deficit, was simulated to increase from 5.9 percent in 2008 to 8.3 percent in 2009. The analysis finds that the results are robust to most assumptions except post-layoff incomes, which substantially mitigated household welfare. The authors also simulate the impact of Latvia's Emergency Social Safety Net components and find that the Safety Net likely mitigated crisis impacts for many beneficiaries. The simulations measure only direct short-run impacts; hence, they do not take into account general equilibrium effects. Post-crisis income data from a different data source suggest that poverty rates increased by 8.0 percentage points between 2008 and 2009. As a result, the authors suggest that their ex-ante simulation performs reasonably well and is a useful tool to identify vulnerable groups during the early stages of a crisis.Facultad de Ciencias Económica

Lifeline or Means-Testing? Electric Utility Subsidies in Honduras

Many countries around the world have implemented subsidies for utility consumption, especially in the case of water and electricity. Most subsidies take the form of a lifeline or increasing block tariff, whereby households that consume less pay less on a unit basis. The idea is that households with low consumption levels are likely to be poor, and some intervention is warranted to enable them to meet their basic needs (the lifeline) at an affordable cost. Whether such subsidies are successful at helping the poor is not clear. In this chapter we assess the targeting performance of a similar subsidy for electricity implemented in Honduras. The subsidy is targeted through the lifeline principle; however, because the consumption threshold for eligibility is relatively high (300 kWh per month), and because those with access to electricity tend to be less poor than those without access, the program’s overall performance is low in terms of poverty reduction. Targeting through means-testing rather than a lifeline, or at least a lower threshold for the lifeline, could help improve the impact of the subsidy, and based on experience in other countries, would not necessarily imply high administrative costs