Gauging the Welfare Effects of Shocks in Rural Tanzania

46 Pages Posted: 20 Apr 2016

See all articles by Luc Christiaensen

Luc Christiaensen

World Bank

Vivian Hoffmann

affiliation not provided to SSRN

Alexander H. Sarris

National and Kapodistrian University of Athens - Faculty of Economics; National Bureau of Economic Research (NBER)

Date Written: November 1, 2007

Abstract

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.

Keywords: Health Monitoring & Evaluation, Crops & Crop Management Systems, Access to Finance, Rural Poverty Reduction

Suggested Citation

Christiaensen, Luc and Hoffmann, Vivian and Sarris, Alexander, Gauging the Welfare Effects of Shocks in Rural Tanzania (November 1, 2007). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2007. Available at SSRN: https://ssrn.com/abstract=1031811

Luc Christiaensen

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Vivian Hoffmann

affiliation not provided to SSRN

No Address Available

Alexander Sarris (Contact Author)

National and Kapodistrian University of Athens - Faculty of Economics ( email )

8 Pesmazoglou street
GR-10559 Athens
Greece
(30-1)8031571 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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