Pramila Krishnan

Vulnerability, seasonality and poverty in Ethiopia

Most studies examining the dynamics of welfare have found large fluctuations in consumption over relatively short periods, suggesting substantial short‐run movements in and out of poverty. The consequence is that cross‐section poverty research may not be able to identify the poor. In this study, we explore this short‐run variability further. We use a data set on a panel of 1450 households in different communities in rural Ethiopia, surveyed thrice, over 18 months. On average year‐to‐year poverty is very similar. However, we find high variability in consumption and poverty, over the seasons and year‐by‐year. Econometric analysis suggests that consumption is affected by idiosyncratic and common shocks, including rainfall and household‐specific crop failure, while households respond to seasonal incentives related to changing labour demand and prices. The results imply that a larger number of households are vulnerable to shocks than implied by the standard poverty statistics, while some of the non‐poor in these statistics are in fact otherwise poor households temporally boosting their consumption as an optimal response to changing seasonal incentives.

In Sickness and in Health: Risk Sharing within Households in Rural Ethiopia

Much of the literature on consumption smoothing and on risk sharing has focused on the ability of the household as a unit to protect its consumption. Little is known about the ability of individual members of the household to keep consumption smooth over time or relative to other members of the household. We use data on adult nutrition in Ethiopia to investigate whether individuals are able to smooth their consumption over time and within the household. We find that poorer households are not able to do so. Furthermore, poor southern households do not engage in complete risk sharing; women in these households bear the brunt of adverse shocks. This result implies that the collective model of household organization, which imposes Pareto efficiency on allocations, is rejected for these households. Finally, we obtain estimates of the relative Pareto weights in household allocation. We find that a wifes relative position is better if customary laws on settlements at divorce are favorable or if she comes from a relatively wealthy background and that poor southern women have lower Pareto weights in allocation.

Income portfolios in rural Ethiopia and Tanzania: Choices and constraints

The paper analyzes the different income portfolios of households using survey data from rural Ethiopia and rural Tanzania. It suggests that the different portfolios held by households cannot be explained by their behaviour towards risk as is usually suggested. It is better explained by differences in ability, location, and in access to credit. A logit analysis of households with different income portfolios, controlling for the effects of location, suggests that entry into high-return activities is determined by investment in particular skills or by access to capital.

Risk sharing and public transfers

We use public transfers in the form of food aid to test for the presence of risk sharing arrangements at the village level in rural Ethiopia. We reject perfect risk-sharing, but find evidence of partial risk-sharing via transfers. There is also evidence consistent with crowding out of informal insurance linked to food aid programmes.

Links and Architecture in Village Networks

In this paper we test the implications of a model of network formation on data from rural Ethiopia. In contrast to the current literature, we demonstrate the critical role of both number of links and architecture in determining the impact of social networks on outcomes. Social capital matters, but its impact differs by the architecture of the network to which one belongs.

Neighbors and Extension Agents in Ethiopia: Who Matters More for Technology Adoption?

The increased adoption of fertiliser and improved seeds are key to raising land productivity in Ethiopian agriculture. However, as in much of sub-Saharan Africa, the adoption and diffusion of such technologies has been slow. We use data from the Ethiopia between 1999-2009 to examine the role of learning from extension agents versus neighbours for both improved seeds and fertiliser. We use the structure of spatial networks of farmers and panel data to identify these influences and find that while the initial impact of extension agents was high, the effect wore off, in contrast to learning from neighbours.

When can school inputs improve test scores

The relationship between school inputs and educational outcomes is critical for educational policy. The authors recognize that households will respond optimally to changes in school inputs and study how such responses affect the link between school inputs and cognitive achievement. To incorporate the forward-looking behavior of households, the authors present a household optimization model relating household resources and cognitive achievement to school inputs. In this framework, if household and school inputs are technical substitutes in the production function for cognitive achievement, the impact of unanticipated inputs is larger than that of anticipated inputs. The authors test the predictions of the model for nonsalary cash grants to schools using a unique data set from Zambia. They find that household educational expenditures and school cash grants are substitutes with a coefficient of elasticity between -0.35 and -0.52. Consistent with the optimization model, anticipated funds have no impact on cognitive achievement, but unanticipated funds lead to significant improvements in learning. This methodology has important implications for educational research and policy.

Changing Living Standards in Southern Indian Villages 1975–2006: Revisiting the ICRISAT Village Level Studies

Abstract We study changes in living conditions using longitudinal data covering 30 years in six villages in Andhra Pradesh and Maharashtra, initially surveyed during 1975–1984, and resurveyed in recent years, as part of the ICRISAT Village Level Studies. Monetary welfare indicators (such as incomes, assets, consumption and poverty) and non-monetary indicators of well-being (such as basic literacy, education, health and subjective well-being) have improved considerably. Consumption growth is linked to literacy and education at baseline. Other assets, such as land, have a neglible impact, suggesting that labour and human capital have been instrumental for growth in these villages.Change involved a large increase in various off-farm activities.

Changes in Living Standards in Villages in India 1975-2004: Revisiting the Icrisat Village Level Studies

This paper examines changes in living conditions in the six villages in Andhra Pradesh and Maharashtra, initially surveyed during 1975-84. This study is linked to the original Village Level Survey (VLS) households to a new survey in the villages conducted during 2001-04 and further extensive survey work in 2005-06, including tracking survey of all individuals ever interviewed in the original VLS [CPRC WP No. 85].

Poverty in Rural Ethiopia 1989–95: Evidence from Household Panel Data in Selected Villages

Identifying the pattern of change in welfare and poverty over time is of increasing importance in the policy debate about reform in Africa. It is recognised that the reform programmes are sustainable only in the long run if they also result in poverty alleviation. However, the data available on changes in poverty in Africa is surprisingly limited compared to Asia. Despite the various household surveys recently implemented (Deaton 1997), problems ranging from access to data to incompatible surveys, have meant that few studies on the changes in welfare since the 1980s have been attempted.1 Cross-section data could be used to perform this task, provided coverage and sampling are done with great care (Deaton 1997). Panel data, although not without their own methodological problems, are more reliable in establishing changes at least within the sample collected. In the context of Africa, with the exception of the rolling panels in some LSMS surveys, such as in Cote d’ Ivoire (Grootaert and Kanbur 1995), the number of panel data sets that could be used for assessing the changes in welfare are limited.