Temperature shocks, growth and poverty thresholds: evidence from rural Tanzania

Letta, Marco, Montalbano, Pierluigi and Tol, Richard S J Temperature shocks, growth and poverty thresholds: evidence from rural Tanzania. Working Paper. University of Sussex Working Paper Series.

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Abstract

Using the LSMS-ISA Tanzania National Panel Survey by the World Bank, we study the relationship between rural household consumption growth and temperature shocks over the period 2008 – 2013. Temperature shocks have a negative and significant impact on household growth only if their initial consumption lies below a critical threshold. As such, temperature shocks slow income convergence among households. Agricultural yields and labour productivity are the main transmission channels. These findings support the Schelling Conjecture: economic development would allow poor farming households to cope with climate change, and closing the yield gap and modernizing agriculture is crucial for adaptation to the negative impacts of global warming.

Item Type: Reports and working papers (Working Paper)
Keywords: weather shocks; climate change; household consumption growth; rural development
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences > H Social Sciences (General)
Depositing User: Prof. Pierluigi Montalbano
Date Deposited: 28 Nov 2017 09:19
Last Modified: 28 Nov 2017 09:19
URI: http://sro.sussex.ac.uk/id/eprint/71632

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