Household vulnerability in rural Tanzania

Year of publication2016

AuthorFAO

PublisherFAO

AbstractThis paper develops a measure of rural household vulnerability that combines existing approaches to estimating idiosyncratic risks with an approach to measuring covariate risk arising from crop production. The methodology is applied to rural households in Tanzania, using household surveys in two export crop producing regions. The results suggest that covariate risk arising from crop production faced by rural households is substantial and increases with farm size. Consumption is estimated to depend strongly on crop income, the variability of which induces considerable overall consumption risk. Overall, covariate risk is found to constitute smaller shares of total consumption risk in the wealthier region, but a dominant share in the poorer region. The share of covariate risk in total household consumption risk is found to be larger among the poor. Vulnerability is quite different between the two regions, with rural households in the poorer region exhibiting considerably higher vulnerability. Vulnerability in the poorer region is found to be larger than poverty incidence.

 

Product typeBook (stand-alone)

SeriesFAO Commodity and Trade Policy Research Working Paper

Areas of workTrade Policy and Partnerships

KeywordsVulnerability to covariate and idiosyncratic shocks, agricultural income instability, rural poverty in Africa.