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Variability in agricultural productivity and rural household consumption inequality: Evidence from Nigeria and Uganda

Author

Listed:
  • Amare, Mulubrhan
  • Shiferaw, Bekele
  • Takeshima, Hiroyuki
  • Mavrotas, George
Abstract
This paper uses multiple rounds of household survey panel data to assess the distributional implications of variability in agricultural productivity in Nigeria and Uganda. It uses both a conventional decomposition and a regression-based inequality decomposition to estimate the impact of climate-induced variability in agricultural productivity. To mitigate the endogeneity associated with unobserved time-invariant and time-variant household fixed effects, we use rainfall shocks as a proxy for estimating the exogenous variability in agricultural productivity that affects consumption. Results suggest that a 10 percent increase in the variability of agricultural productivity tends to decrease household consumption by 38 and 52 percent on average for Nigeria and Uganda, respectively. Controlling for other factors, variability in agricultural productivity contributed to between 25 and 43 percent of consumption inequality between 2010 and 2015 for Nigeria; and 16 and 31 percent of consumption inequality between 2009 and 2011 for Uganda. We also show that variability in agricultural productivity increases changes in consumption inequality over time.

Suggested Citation

  • Amare, Mulubrhan & Shiferaw, Bekele & Takeshima, Hiroyuki & Mavrotas, George, 2021. "Variability in agricultural productivity and rural household consumption inequality: Evidence from Nigeria and Uganda," NSSP working papers 67, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:nsspwp:67
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    3. Villacis, Alexis H. & Mayorga, Joaquin & Mishra, Ashok K., 2022. "Experience-based food insecurity and agricultural productivity in Nigeria," Food Policy, Elsevier, vol. 113(C).
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    5. Mulubrhan Amare & Kibrom A. Abay & Patrick Hatzenbuehler, 2024. "Spatial market integration during a pandemic: Evidence from food markets in Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 55(1), pages 86-103, January.
    6. Amina Ika Micah, 2022. "Three essays on access to credit and financial shock in Nigeria," Economics PhD Theses 0422, Department of Economics, University of Sussex Business School.
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    Keywords

    NIGERIA; WEST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; UGANDA; EAST AFRICA; agricultural productivity; household consumption; rural areas; climate; shock; consumption; equality; inequality;
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