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Income Diversification and Income Inequality: Household Responses to the 2013 Floods in Pakistan

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  • Shaikh M. S. U. Eskander

    (Department of Economics, Faculty of Business and Social Sciences, Kingston University London, Kingston upon Thames KT1 2EE, UK
    Grantham Research Institute, London School of Economics and Political Science, London WC2A 2AE, UK)

  • Sam Fankhauser

    (Grantham Research Institute, London School of Economics and Political Science, London WC2A 2AE, UK
    Smith School of Enterprise and the Environment, University of Oxford, Oxford OX1 3QY, UK)

Abstract

In this paper we investigate the economic response of rural households to the 2013 floods in Pakistan. The case study illustrates the important roles of labor supply adjustments and income diversification in coping with climate-related risks. Using detailed household panel data that were collected before and after the 2013 floods, we find that the exposure to flood results in lower participation in farm activities. The overall effects are decreased diversification in the sources of income and ambiguous reduction in inequality which is associated with overall declines in incomes. These changes could be locked in if affected households do not have sufficient assets to resume farming. The results suggest intervention points for public policy, related to labor mobility and access to capital.

Suggested Citation

  • Shaikh M. S. U. Eskander & Sam Fankhauser, 2022. "Income Diversification and Income Inequality: Household Responses to the 2013 Floods in Pakistan," Sustainability, MDPI, vol. 14(1), pages 1-12, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:1:p:453-:d:716057
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    More about this item

    Keywords

    employment; floods; income diversification; income inequality; Pakistan;
    All these keywords.

    JEL classification:

    • N0 - Economic History - - General

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