Blame it on the rain: rainfall variability, consumption smoothing, and subjective well-being in rural Ethiopia
Yonas Alem and Jonathan Colmer
How does income uncertainty affect individual well-being? Combining individual-level panel data from rural Ethiopia with high-resolution meteorological data, we estimate that mean-preserving increases in rainfall variability are associated with reductions in objective consumption and subjective well-being. Mediation analysis suggests that the estimated reduction in consumption does not fully explain the total effect on individual well-being. Increased rainfall variability also has a large direct effect on individual well-being. These findings suggest that the gains from further consumption smoothing are likely greater than estimates based solely on observed consumption fluctuations.
1 May 2022
American Journal of Agricultural Economics 104(3) , pp.905-920, 2022
https://onlinelibrary.wiley.com/doi/full/10.1111/ajae.12253
This Journal article is published under the centre's Growth programme.