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Income and its variability in a drought-prone region: seasonality, location and household characteristics

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  • Susanne van Dillen

Abstract

This paper investigates three questions in a poor and drought-prone region of western Orissa, India. Is aggregate income stable? How do a household's characteristics and its local environment influence both the level of its income and its variability? Does a short-lived, common shock cause significant income variability? The study is based on an original, three-season panel data set of 240 households, in which one monsoon season was marked by a severe drought. Aggregate income varied little, but there were considerable fluctuations in individual household incomes across seasons, the main sources of which were idiosyncratic shocks. This suggests that although current programmes are effective in stabilizing aggregate income against drought, massive additional intervention along the same lines is not an efficient way to combat a drought's effects. Rather, it is desirable to promote suitable insurance arrangements to deal with idiosyncratic shocks, measures which would complement those designed to raise incomes permanently.

Suggested Citation

  • Susanne van Dillen, 2008. "Income and its variability in a drought-prone region: seasonality, location and household characteristics," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(4), pages 579-596.
    • Handle: RePEc:taf:eurjdr:v:20:y:2008:i:4:p:579-596
    DOI: 10.1080/09578810802464912
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    Cited by:

    1. Bell , Clive & van Dillen , Susanne, 2015. "On the Way to Good Health? Rural Roads and Morbidity in Upland Orissa," Working Papers 0602, University of Heidelberg, Department of Economics.
    2. Clive Bell & Susanne van Dillen, 2014. "How Does India’s Rural Roads Program Affect the Grassroots? Findings from a Survey in Upland Orissa," Land Economics, University of Wisconsin Press, vol. 90(2), pages 372-394.
    3. Bell, Clive, 2012. "Estimating the social profitability of India's rural roads program : a bumpy ride," Policy Research Working Paper Series 6168, The World Bank.
    4. Bell, Clive & van Dillen, Susanne, 2012. "How does India's rural roads program affect the grassroots ? findings from a survey in Orissa," Policy Research Working Paper Series 6167, The World Bank.
    5. Clive Bell & Abhiroop Mukhopadhyay, 2020. "Income Guarantees and Borrowing in Risky Environments: Evidence from India's Rural Employment Guarantee Scheme," Economica, London School of Economics and Political Science, vol. 87(347), pages 763-812, July.

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