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Consumption vulnerability to risk in rural Pakistan

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  • Takashi Kurosaki

Abstract

As one of the dimensions of vulnerability, this paper empirically investigates the inability of rural dwellers to cope with negative income shocks. A variable coefficient regression model is applied to a two-period household panel dataset collected in the North-West Frontier Province, Pakistan, an area with high incidence of income poverty and low human development. The empirical model allows for a different ability to smooth consumption, approximated by a linear function of households' attributes, and controls for the endogeneity of observed changes in income, using qualitative information on subjective risk assessment. Estimation results show that the ability to cope with negative income shocks is lower for households that are aged, landless and do not receive remittances regularly.

Suggested Citation

  • Takashi Kurosaki, 2006. "Consumption vulnerability to risk in rural Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 42(1), pages 70-89.
    • Handle: RePEc:taf:jdevst:v:42:y:2006:i:1:p:70-89
    DOI: 10.1080/00220380500356696
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    References listed on IDEAS

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    1. Ethan Ligon & Laura Schechter, 2003. "Measuring Vulnerability," Economic Journal, Royal Economic Society, vol. 113(486), pages 95-102, March.
    2. Margaret Grosh & Paul Glewwe, 2000. "Designing Household Survey Questionnaires for Developing Countries : Lessons from 15 Years of the Living Standards Measurement Study, Volume 2," World Bank Publications - Books, The World Bank Group, number 15194.
    3. Luc J. Christiaensen & Kalanidhi Subbarao, 2005. "Towards an Understanding of Household Vulnerability in Rural Kenya," Journal of African Economies, Centre for the Study of African Economies, vol. 14(4), pages 520-558, December.
    4. Margaret Grosh & Paul Glewwe, 2000. "Designing Household Survey Questionnaires for Developing Countries : Lessons from 15 Years of the Living Standards Measurement Study, Volume 3," World Bank Publications - Books, The World Bank Group, number 15195.
    5. Ethan Ligon & Laura Schechter, 2002. "Measuring Vulnerability: The Director's Cut," WIDER Working Paper Series DP2002-86, World Institute for Development Economic Research (UNU-WIDER).
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