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Cash Transfer Programmes for Managing Climate Risk: Evidence from a Randomized Experiment in Zambia

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  • Asfaw, Solomon
  • Carraro, Alessandro
  • Davis, Benjamin
  • Handa, Sudhanshu
  • Seidenfeld, David

Abstract

Cash transfer programmes are increasingly being utilized in order to combat poverty and hunger as well as to building the human capital of future generations. Even though most of these programmes are not explicitly designed to help households manage climate risk, there are good reasons to expect that cash transfers can be good instrument to build household resilience against climatic risk. The goal of this study is to provide an empirical analysis of the effect of weather risk on rural households’ welfare using impact evaluation data from the Zambia Child Grant Programme (CGP) together with set of novel weather variation indicators based on interpolated gridded and re-analysis weather data that capture the peculiar features of short term and long term variations in rainfall. In particular, we estimate the impact of weather shocks on a rich set of welfare and food security indicators (including total expenditure, food expenditure, non-food expenditure, calorie intake and dietary diversity) and investigate the role of cash transfer for managing climate risk. We find strong evidence that cash transfer programmes has a mitigating role against the negative effects of weather shocks. Our results in fact highlight how important the receipt of social cash transfer is for households lying in the bottom quantile of consumption and food security distributions in moderating the negative effect of weather shock. Hence, integrating climate change and social protection tools into a comprehensive poverty reduction and social protection strategy should be of primary interest for policy makers and government when setting their policy agenda.

Suggested Citation

  • Asfaw, Solomon & Carraro, Alessandro & Davis, Benjamin & Handa, Sudhanshu & Seidenfeld, David, 2016. "Cash Transfer Programmes for Managing Climate Risk: Evidence from a Randomized Experiment in Zambia," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246280, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae16:246280
    DOI: 10.22004/ag.econ.246280
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    References listed on IDEAS

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    1. Angus Deaton & Christina Paxson, 1998. "Economies of Scale, Household Size, and the Demand for Food," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 897-930, October.
    2. Silvio Daidone & Luca Pellerano & Sudhanshu Handa & Benjamin Davis, 2015. "Is Graduation from Social Safety Nets Possible? Evidence from Sub‐Saharan Africa," IDS Bulletin, Blackwell Publishing, vol. 46(2), pages 93-102, March.
    3. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521608275, January.
    4. Skoufias, Emmanuel, 2003. "Economic Crises and Natural Disasters: Coping Strategies and Policy Implications," World Development, Elsevier, vol. 31(7), pages 1087-1102, July.
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    Cited by:

    1. Ana Maria Loboguerrero & Bruce M. Campbell & Peter J. M. Cooper & James W. Hansen & Todd Rosenstock & Eva Wollenberg, 2019. "Food and Earth Systems: Priorities for Climate Change Adaptation and Mitigation for Agriculture and Food Systems," Sustainability, MDPI, vol. 11(5), pages 1-26, March.
    2. Tancrède Voituriez, 2020. "The quest for green welfare state in developing countries," World Inequality Lab Working Papers hal-02876972, HAL.
    3. Chonabayashi, Shun & Jithitikulchai, Theepakorn & Qu, Yeqing, 2020. "Does agricultural diversification build economic resilience to drought and flood? Evidence from poor households in Zambia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 15(01), March.
    4. Fanzo, Jessica & McLaren, Rebecca & Davis, Claire & Choufani, Jowel, 2017. "Climate change and variability: What are the risks for nutrition, diets, and food systems?," IFPRI discussion papers 1645, International Food Policy Research Institute (IFPRI).
    5. Tancrède Voituriez, 2020. "The quest for green welfare state in developing countries," Working Papers hal-02876972, HAL.
    6. Tancrède Voituriez, 2020. "The quest for green welfare state in developing countries," Working Papers hal-02567919, HAL.
    7. Hansen, James & Hellin, Jon & Rosenstock, Todd & Fisher, Eleanor & Cairns, Jill & Stirling, Clare & Lamanna, Christine & van Etten, Jacob & Rose, Alison & Campbell, Bruce, 2019. "Climate risk management and rural poverty reduction," Agricultural Systems, Elsevier, vol. 172(C), pages 28-46.

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    Keywords

    Agricultural Finance; Financial Economics; Research Methods/ Statistical Methods;
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