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You are not alone: social capital and risk exposure in rural Ethiopia

Author

Listed:
  • Tesfamicheal Wossen

    (International Institute of Tropical Agriculture (IITA))

  • Salvatore Falco

    (University of Geneva)

  • Thomas Berger

    (University of Hohenheim)

  • William McClain

    (Purdue University)

Abstract

This paper examines the impact of shocks on food security and the insurance role of social capital and informal social networks. In particular, by combining household panel data, weather data, self-reported shocks and detailed social capital information, the paper investigates the insurance role of social capital against covariate and idiosyncratic shocks. Our results suggest that both covariate and idiosyncratic shocks increase the prevalence of food insecurity. However, households with a higher stock of social capital were able to smooth consumption. We also found that food consumption is not insured through social capital when a shock affects the whole risk-sharing network. Moreover, we show that formal policy interventions such as access to consumption credit and safety nets are the only effective ways of insuring food consumption when a shock affects the entire risk-sharing network.

Suggested Citation

  • Tesfamicheal Wossen & Salvatore Falco & Thomas Berger & William McClain, 2016. "You are not alone: social capital and risk exposure in rural Ethiopia," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(4), pages 799-813, August.
    • Handle: RePEc:spr:ssefpa:v:8:y:2016:i:4:d:10.1007_s12571-016-0587-5
    DOI: 10.1007/s12571-016-0587-5
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    Citations

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    Cited by:

    1. Meike Will & Jürgen Groeneveld & Karin Frank & Birgit Müller, 2021. "Informal risk-sharing between smallholders may be threatened by formal insurance: Lessons from a stylized agent-based model," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-18, March.
    2. Wossen, Tesfamicheal & Berger, Thomas & Haile, Mekbib G. & Troost, Christian, 2018. "Impacts of climate variability and food price volatility on household income and food security of farm households in East and West Africa," Agricultural Systems, Elsevier, vol. 163(C), pages 7-15.
    3. Thomas Berger & Christian Troost & Tesfamicheal Wossen & Evgeny Latynskiy & Kindie Tesfaye & Sika Gbegbelegbe, 2017. "Can smallholder farmers adapt to climate variability, and how effective are policy interventions? Agent-based simulation results for Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 48(6), pages 693-706, November.
    4. Mingsong Hao & Chuntian Lu & Xi Zhou & Jing Xu, 2023. "How Agricultural Farmers Respond to Risks during the COVID-19 Pandemic: An Exploration through the Dual Social Capitals Approach," Agriculture, MDPI, vol. 13(2), pages 1-18, February.
    5. Konstantinos Matakos & Dimitrios Minos & Ari Perdana & Elizabeth Radin, 2022. "“Dragon boating” alone? Community ties and systemic income shocks," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(1), pages 55-81, January.
    6. Haddis Solomon & Yoko Kijima, 2022. "Does Land Certification Mitigate the Negative Impact of Weather Shocks? Evidence from Rural Ethiopia," Sustainability, MDPI, vol. 14(19), pages 1-17, October.
    7. Khor, L.Y. & Zeller, M., 2018. "Storing a staple crop for own consumption: Linkages to food security," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277244, International Association of Agricultural Economists.
    8. Saeed Nosratabadi & Nesrine Khazami & Marwa Ben Abdallah & Zoltan Lackner & Shahab S. Band & Amir Mosavi & Csaba Mako, 2020. "Social Capital Contributions to Food Security: A Comprehensive Literature Review," Papers 2012.03606, arXiv.org.
    9. Egamberdiev, Bekhzod & Bobojonov, Ihtiyor & Kuhn, Lena & Glauben, Thomas, 2023. "Household resilience capacity and food security: Evidence from Kyrgyzstan," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 15(4), pages 967-988.

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    More about this item

    Keywords

    Consumption; Social capital; Insurance; Shocks; Ethiopia;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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