Conference Agenda

This study examines the impact of climate variability on poverty vulnerability in Ethiopia, emphasizing the effects on per unit consumption and accounting for both idiosyncratic and covariate shocks. The work is particularly relevant to those interested in development challenges and poverty alleviation strategies in climate-affected regions. I address the specific question of how climate variability, alongside socioeconomic factors, contributes to poverty vulnerability at both household and regional levels. Using a three-round Ethiopian Socioeconomic Survey (ESS) panel dataset comprising 3,313 households, I employ a two-level random coefficient model and a fixed-effects model to analyze these dynamics. The findings reveal that the relative contributions of climate variability to poverty vulnerability surpass those of socioeconomic factors, with this effect being more pronounced at the regional level than the household level. Additionally, poverty-driven vulnerability proves more severe than risk-induced vulnerability. This, in turn, exacerbates household-level vulnerability, as even minor changes in temperature, precipitation, and agroecological conditions significantly reduce consumption. Rural households, particularly those with larger families, higher dependency ratios, and older members, face disproportionate impacts. These results underscore the importance of integrating climate adaptation, sustainable agricultural practices, and social protection measures to reduce the adverse effects of climate variability on Ethiopia’s most vulnerable populations. Addressing these challenges is essential for resilience and sustainable development.