Self-Reported Weather Shocks and Extreme Weather Data: Evidence From Vietnam
Economic Analysis and Policy 65, 117-138, 2020
63 Pages Posted: 10 Jan 2020
Date Written: December 20, 2019
Analysis of rural vulnerability to weather shocks requires an accurate exposure record. Both self-reported and weather data records have been used with potential biases. We are the first to evaluate these biases by constructing two comparable records: self-reported weather shocks from a rural household panel dataset and measured weather shocks from weather data. Despite their positive relationship and similar average welfare effects, the two records display a large discrepancy. Being endogenous, the self-reported record introduces the attenuation bias in analysing non-farm diversification in response to shocks. We suggest to instrument the self-reported shock with the measured shock for better analytical quality.
Keywords: Rural households; non-farm diversification; weather shocks; self-reported biases; Vietnam
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