Sub-national vulnerability measures:A spatial perspective

Most empirical investigations into economic vulnerability focus on the national level. Although some recent contributions investigate vulnerability from a sub-national perspective they contribute to the literature in an aspatial manner, as they do not explicitly account for the relative locations of areas and for the potential of spillovers between contiguous areas. This paper extends the current literature on a number of important fronts. First, we augment a principle components model to take explicit account of spatial autocorrelation and apply it to South African magisterial district level data. Second, by comparing spatial and aspatial models estimates, our empirical results illustrate the presence and importance of spatial spillovers in local vulnerability index estimates. Third, we augment the methodology on the vulnerability intervention index and present results which highlight areas that are performing better and worse than would be expected. After accounting for spatial spillovers, the results illustrate a clear urban-rural vulnerability divide.