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Title:How Do Rural Households Cope With Shocks? Evidence from Northeast Thailand PDF Logo
Authors:Tongruksawattana, Songporne
Waibel, Hermann
Schmidt, Erich
Issue Date:2010
Series/Report no.:Proceedings of the German Development Economics Conference, Hannover 2010 53
Abstract:Rural households in emerging market economies are often vulnerable to poverty due to negative shocks and limited capacity for effective ex-post coping. This study analyses the relationship between shock types and coping decisions of rural households using the panel survey data of some 2,200 households in Northeast Thailand in the context of the DFG Research Unit 756. Empirical observations show that a large share of households suffered shocks mainly related to ecological, economic, health and social aspects. Results from a univariate probit model show that wealth status and shock severity in terms of income and asset losses encourage coping action. Regarding types of coping measure, asking for remittances from migrant household members and relatives, taking on public support programs, reallocating household resources, borrowing from formal and informal sources, using savings and selling assets are dominant. Multivariate probit model elaborates on the effect of shock types, household characteristics and location factors on the choice of coping activity. Overall, the results suggest that shocks experienced by rural households are likely to negatively affect their future welfare and more effective social risk management strategies are needed.
Subjects:Keywords: shocks
coping actions
vulnerability to poverty
rural households
Thailand
Document Type:Conference Paper
Appears in Collections:Proceedings of the German Development Economics Conference, 2010 (Hannover)

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