Research of Members

Liebenehm, Sabine, Ingmar Schumacher, and Eric Strobl. 2023. Rainfall Shocks and Risk Aversion: Evidence from Southeast Asia. American Journal of Agricultural Economics.

Empirical evidence on the temporal stability of risk aversion and the role of exogenous shocks is inconclusive. In this paper we revisit this problem and analyze whether and to what extent risk aversion changes in response to rainfall shocks in an agrarian setting, and the role of changes in yields and output prices as two potential channels. We study this both in a simple theoretical model and in an extensive empirical study. The theoretical model predicts that under prudence, households that are either a net seller, a net buyer, or autarkic, increase risk aversion. To test the model predictions, we use a panel data set of the same 1,005 respondents from Northeastern Thailand and Central Vietnam (TVSEP) interviewed across five survey waves between 2008 and 2017 and combine it with historical rainfall data at the village level to capture negative rainfall shocks. Our empirical strategy exploits exogenous variation in the timing, location, and magnitude of rainfall shortages to identify their effect on risk aversion. We find that rainfall shortages increase respondents’ risk aversion, a finding remarkably stable across alternative specifications. The magnitude of the main effect of rainfall shortages on risk aversion is largest among net buyers, and approximately half the size among net sellers. Autarkic households do not exhibit a significant effect. Although rainfall shortages lead to significant reductions in agricultural yields and significant increases in commodity prices, the mediation analysis suggests that these market mechanisms do not play a significant role, except for a small statistically significant mediating effect of prices among the net buying household group. The finding that rainfall shortages lead to significant increases in risk aversion, especially among households that depend on local markets to buy food, has potentially important implications for food security and poverty dynamics. An increased level of risk aversion can undermine investments, e.g., in a beneficial technology, induce forgone returns, and increase the likelihood to fall or being pushed further below the poverty line.

Further Information.

Braczkowski, A.R., O’Bryan, C.J., Lessmann, C. et al. The unequal burden of human-wildlife conflict. Commun Biol 6, 182 (2023).

Human-wildlife conflict is one of the most pressing sustainable development challenges globally. This is particularly the case where ecologically and economically important wildlife impact the livelihoods of humans. Large carnivores are one such group and their co-occurrence with low-income rural communities often results in real or perceived livestock losses that place increased costs on already impoverished households. Here we show the disparities associated with the vulnerability to conflict arising from large carnivores on cattle (Bos taurus) globally. Across the distribution of 18 large carnivores, we find that the economic vulnerability to predation losses (as measured by impacts to annual per capita income) is between two and eight times higher for households in transitioning and developing economies when compared to developed ones. This potential burden is exacerbated further in developing economies because cattle keepers in these areas produce on average 31% less cattle meat per animal than in developed economies. In the lowest-income areas, our estimates suggest that the loss of a single cow or bull equates to nearly a year and a half of lost calories consumed by a child. Finally, our results show that 82% of carnivore range falls outside protected areas, and five threatened carnivores have over one third of their range located in the most economically sensitive conflict areas. This unequal burden of human-carnivore conflict sheds light on the importance of grappling with multiple and conflicting sustainable development goals: protecting life on land and eliminating poverty and hunger.

Further Information.


PhD Research Position at the University of Jena

The Chair of Economic Policy at the University of Jena is seeking a full-time Research Associate (PhD Candidate). The position will begin on March 1, 2024, with an initial contract term of three years. Compensation will be in accordance with TV-L E13 guidelines. All applications should be submitted by November 30, 2023.

More information can be found here.

PhD Teaching Assistant Position at the University of Passau

The Chair of Development Economics (Professor Michael Grimm) of the School of Business, Economics and Information Systems of the University of Passau is looking for a Graduate Teaching Assistant in Development Economics (PhD Position). An excellent command of both English and German is required. The position is set to commence as soon as possible but no later than April 1, 2024. The contract is initially set for a duration of three years. Compensation will be based on the TV-L E13 scale, and the role is available at 66% of a full-time position. The deadline for application submissions is October 6, 2023.

More information can be found here.

Event Information

Doctoral Workshop 2022

The Doctoral Workshop 2022 of the Research Group on Development Economics of the German Economic Association was organized by Professor Tilman Brück (IGZ, HU Berlin & ISDC) and took place on September 22nd and 23rd, 2022 in Berlin, Germany. The workshop’s aim was to enable doctoral students to improve their ongoing research, advise them on the preparation of a refereed journal article, practice academic discussions and build informal networks.

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