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Consumption insurance and vulnerability to poverty: a synthesis of the evidence from Bangladesh, Ethiopia, Mali, Mexico and Russia

Skoufias, Emmanuel; & Quisumbing, Agnes R. (2005). Consumption insurance and vulnerability to poverty: a synthesis of the evidence from Bangladesh, Ethiopia, Mali, Mexico and Russia. European Journal of Development Research, 17(1), 24-58.

Skoufias, Emmanuel; & Quisumbing, Agnes R. (2005). Consumption insurance and vulnerability to poverty: a synthesis of the evidence from Bangladesh, Ethiopia, Mali, Mexico and Russia. European Journal of Development Research, 17(1), 24-58.

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This paper synthesises the results of five IFPRI studies using household panel data from Bangladesh, Ethiopia, Mali, Mexico and Russia, which examine the extent to which households are able to insure their consumption from specific economic shocks and fluctuations in their real income. The extent of consumption insurance is defined by the degree to which the growth rate of household consumption covaries with the growth rate of household income. All the case studies show that food consumption is better insured than non-food consumption from idiosyncratic shocks. Adjustments in non-food consumption appear to act as a mechanism for partially insuring ex-post food consumption from the effects of income changes. Food consumption is also more likely to be covered by informal insurance arrangements at the community level than non-food consumption. Households use a portfolio of risk-coping strategies, but may not be equally able to use them. Poorer households may be less able to use mechanisms that rely on initial wealth as collateral. In this regard, public transfer programmes may have a more redistributive effect.




JOUR



Skoufias, Emmanuel
Quisumbing, Agnes R.



2005


European Journal of Development Research

17

1

24-58






0002-9548

10.1080/09578810500066498



1876