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

Letta, Marco, Montalbano, Pierluigi and Tol, Richard S J (2018) Temperature shocks, growth and poverty thresholds: evidence from rural Tanzania. World Development, 112. pp. 13-32. ISSN 0305-750X

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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: Article
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences > HB Economic theory. Demography
Depositing User: Richard Tol
Date Deposited: 07 Aug 2018 09:25
Last Modified: 17 Aug 2018 08:59
URI: http://sro.sussex.ac.uk/id/eprint/77550

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