Gauging the Welfare Effects of Shocks in Rural Tanzania
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World Bank, Washington, DC
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Studies of risk and its consequences
tend to focus on one risk factor, such as a drought or an
economic crisis. Yet 2003 household surveys in rural
Kilimanjaro and Ruvuma, two cash-crop-growing regions in
Tanzania that experienced a precipitous coffee price decline
around the turn of the millennium, identified health and
drought shocks as well as commodity price declines as major
risk factors, suggesting the need for a comprehensive
approach to analyzing household vulnerability. In fact, most
coffee growers, except the smaller ones in Kilimanjaro,
weathered the coffee price declines rather well, at least to
the point of not being worse off than non-coffee growers.
Conversely, improving health conditions and reducing the
effect of droughts emerge as critical to reduce
vulnerability. One-third of the rural households in
Kilimanjaro experienced a drought or health shocks,
resulting in an estimated 8 percent welfare loss on average,
after using savings and aid. Rainfall is more reliable in
Ruvuma, and drought there did not affect welfare.
Surprisingly, neither did health shocks, plausibly because
of lower medical expenditures given limited health care provisions.
Palabras clave
ABSENTEEISM, ACCESS TO CAPITAL, ACCESS TO CREDIT, ACCESS TO IRRIGATION, ACCESSIBILITY, ADDITIONAL INCOME, AGRICULTURAL ACTIVITIES, AGRICULTURAL HOUSEHOLDS, AGRICULTURE ORGANIZATION, AMOUNT OF CONTRIBUTIONS, ASSET HOLDINGS, BANANA TREES, BANANAS, BANKING SERVICES, CALCULATIONS, CASH CROPS, CASH RESERVES, CASH-CROP, CASHEW NUTS, COFFEE, COFFEE CROP, COFFEE FARMERS, COFFEE GROWERS, COFFEE GROWING, COFFEE PRICES, COFFEE PRODUCTION, COFFEE TREES, COMMODITIES, COMMODITY, CONSUMER, CONSUMPTION EXPENDITURES, CONSUMPTION SMOOTHING, COVARIATE SHOCKS, CRIME, CROP, CROP FAILURE, CROPS, CROWDING OUT, CULTIVATED LAND, CULTIVATION, DEMOGRAPHIC CHARACTERISTICS, DIVERSIFICATION, DROUGHTS, EARNINGS, ECONOMIC ACTIVITY, ECONOMIC CRISES, ECONOMIC CRISIS, ECONOMIC DEVELOPMENT, EDUCATIONAL ATTAINMENTS, EFFECTS OF DROUGHT, EMPLOYMENT OPPORTUNITIES, ETHNIC GROUPS, EXCHANGE RATE, EXPENDITURE, EXPENDITURES, EXTERNAL SHOCK, FAMILIES, FAMILY MEMBER, FAO, FARM, FARM ENTERPRISE, FARM SELF-EMPLOYMENT, FARMING, FEMALE-HEADED HOUSEHOLD, FEMALE-HEADED HOUSEHOLDS, FOOD AID, FOOD CONSUMPTION, FOOD PRODUCTION, FORMAL CREDIT, FORMAL EDUCATION, FULL ACCESS, GENDER, HEALTH CARE, HEALTH ECONOMICS, HEALTH SERVICES, HEALTH SPENDING, HOLISTIC APPROACH, HOSPITALIZATION, HOUSEHOLD BUDGET, HOUSEHOLD COMPOSITION, HOUSEHOLD CONSUMPTION, HOUSEHOLD DEMOGRAPHICS, HOUSEHOLD EXPENDITURES, HOUSEHOLD HEAD, HOUSEHOLD HEADS, HOUSEHOLD SIZE, HOUSEHOLD SURVEY, HOUSEHOLD SURVEYS, HOUSEHOLD VULNERABILITY, HOUSEHOLD WELFARE, HUMAN CAPITAL, INCOME, INCOME GENERATION, INCOME SHOCK, INSURANCE, INSURANCE MARKETS, INSURANCE SCHEMES, INTERNATIONAL BANK, IRRIGATION, LANDHOLDING SIZE, LANDHOLDINGS, LIFE CYCLE, LIVESTOCK OWNERSHIP, LIVING STANDARDS, LOW-INCOME, LOWER INCOMES, MARGINAL RATE, MEDICAL EXPENSES, MICRO-FINANCE, MICRO-FINANCE INSTITUTIONS, MORTALITY, POLITICAL ECONOMY, POOR, POSSESSION, POSSESSIONS, POVERTY ALLEVIATION, POVERTY INCIDENCE, POVERTY REDUCTION, POVERTY REDUCTION STRATEGY, PRIMARY EDUCATION, PROBABILITY, PRODUCTIVE CAPITAL, PRODUCTIVITY, PROFITABILITY, QUALITY OF LIFE, QUESTIONNAIRE, RATE OF RETURNS, RECEIPT, REMITTANCE, REMITTANCES, RISK AVERSION, RISK FACTORS, RISK SHARING, RURAL, RURAL AREAS, RURAL HOUSEHOLD, RURAL HOUSEHOLDS, RURAL POPULATION, SAFETY NET, SAFETY NET PROGRAMS, SALE, SALES, SAVINGS, SECONDARY EDUCATION, SELF-EMPLOYMENT, SENIOR, SOCIAL CAPITAL, SOCIAL PROTECTION, SUB-SAHARAN AFRICA, TARGETING, TOBACCO, UNEMPLOYMENT, VALUE OF ASSETS, VILLAGE, VILLAGES, WAGE, WORKING AGE, YIELDS