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The Distributional and Multi-Sectoral Impacts of Rainfall Shocks: Evidence From Computable General Equilibrium Modelling for the Awash Basin, Ethiopia

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  • Borgomeo, Edoardo
  • Vadheim, Bryan
  • Woldeyes, Firew B.
  • Alamirew, Tena
  • Tamru, Seneshaw
  • Charles, Katrina J.
  • Kebede, Seifu
  • Walker, Oliver

Abstract

This paper presents an analysis of the multi-sectoral and distributional economic impacts of rainfall shocks in the Awash river basin in Ethiopia. Using novel disaggregated data on crop production, we estimate the direct impacts of rainfall shocks on agriculture and then use a Computable General Equilibrium model to simulate how these rainfall shocks propagate through the wider economy of the basin under three different climate change scenarios. The basin's economy and expanding agricultural sector are highly vulnerable to the impacts of rainfall shocks. A rainfall decrease scenario could lead to a 5% decline in the basin's GDP, with agricultural GDP standing to drop by as much as 10%. All sectors benefit from greater rainfall amounts. Distributional impacts depend on income group, with poor households accruing greater benefits relative to non-poor households under a scenario of additional rainfall and suffering proportionally lower income losses under a scenario of rainfall decrease.

Suggested Citation

  • Borgomeo, Edoardo & Vadheim, Bryan & Woldeyes, Firew B. & Alamirew, Tena & Tamru, Seneshaw & Charles, Katrina J. & Kebede, Seifu & Walker, Oliver, 2018. "The Distributional and Multi-Sectoral Impacts of Rainfall Shocks: Evidence From Computable General Equilibrium Modelling for the Awash Basin, Ethiopia," Ecological Economics, Elsevier, vol. 146(C), pages 621-632.
    • Handle: RePEc:eee:ecolec:v:146:y:2018:i:c:p:621-632
    DOI: 10.1016/j.ecolecon.2017.11.038
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    References listed on IDEAS

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    1. Dercon, Stefan & Christiaensen, Luc, 2011. "Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 96(2), pages 159-173, November.
    2. Winston Yu & Yi-Chen Yang & Andre Savitsky & Donald Alford & Casey Brown & James Wescoat & Dario Debowicz & Sherman Robinson, 2013. "Indus Basin of Pakistan : Impacts of Climate Risks on Water and Agriculture," World Bank Publications - Books, The World Bank Group, number 13834.
    3. Dercon, Stefan & Christiaensen, Luc, 2011. "Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 96(2), pages 159-173, November.
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    Cited by:

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    2. Amare, Mulubrhan & Jensen, Nathaniel D. & Shiferaw, Bekele & Cissé, Jennifer Denno, 2018. "Rainfall shocks and agricultural productivity: Implication for rural household consumption," Agricultural Systems, Elsevier, vol. 166(C), pages 79-89.
    3. Wilson Kalisa & Tertsea Igbawua & Fanan Ujoh & Igbalumun S. Aondoakaa & Jean Nepomuscene Namugize & Jiahua Zhang, 2021. "Spatio-temporal variability of dry and wet conditions over East Africa from 1982 to 2015 using quantile regression model," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 106(3), pages 2047-2076, April.
    4. Lin, Boqiang & Jia, Zhijie, 2019. "How does tax system on energy industries affect energy demand, CO2 emissions, and economy in China?," Energy Economics, Elsevier, vol. 84(C).
    5. Hailu, Reta & Tolossa, Degefa, 2020. "Multi-stakeholder platforms: Institutional options to achieve water security in the awash basin of Ethiopia," World Development Perspectives, Elsevier, vol. 19(C).
    6. Siriklao Sangkhaphan & Yang Shu, 2019. "The Effect of Rainfall on Economic Growth in Thailand: A Blessing for Poor Provinces," Economies, MDPI, vol. 8(1), pages 1-17, December.
    7. Femi E. Hounnou & Houinsou Dedehouanou & Afio Zannou & Johanes Agbahey & Gauthier Biaou, 2019. "Economy-Wide Effects of Climate Change in Benin: An Applied General Equilibrium Analysis," Sustainability, MDPI, vol. 11(23), pages 1-15, November.
    8. Husen Maru & Amare Haileslassie & Tesfaye Zeleke & Befikadu Esayas, 2021. "Analysis of Smallholders’ Livelihood Vulnerability to Drought across Agroecology and Farm Typology in the Upper Awash Sub-Basin, Ethiopia," Sustainability, MDPI, vol. 13(17), pages 1-28, August.
    9. Burton C. English & S. Aaron Smith & R. Jamey Menard & David W. Hughes & Michael Gunderson, 2021. "Estimated Economic Impacts of the 2019 Midwest Floods," Economics of Disasters and Climate Change, Springer, vol. 5(3), pages 431-448, October.
    10. Ortuzar, Iban & Serrano, Ana & Xabadia, Àngels, 2023. "Macroeconomic impacts of water allocation under droughts. Accounting for global supply chains in a multiregional context," Ecological Economics, Elsevier, vol. 211(C).

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