Monitoring Household Coping during Shocks: Evidence from Kenya and the Philippines

1. Monitoring Household Coping during Shocks:Evidence from Kenya and the Philippines Shantanu Mukherjee and Shivani Nayyar UNDP, October 2011 AEC, Addis Ababa October 27th 2011

2. Macroeconomic data is abundantly available Aggregate Shocks and Human Development Source: IMF WEO September 2011 - Important to monitor impacts on people, human development

3. Impacts on health and nutrition • Paxson and Schady (2005), Baird et al (2007), Friedman and Schady (2009), Compton et al (2011) • Impacts on education • Knowles et al (1999), Ferreira and Schady (2009) • Survey • Conceicao et al (2009) • Traditionally a 3-4 year lag • Household surveys done at pre-determined intervals. • Many of these impacts take a few years to manifest. • Real time data and action needed. Monitoring impacts on households

4. Coping strategies mediate impacts • Can lead to more effective monitoring and response - Real time behavioral changes • Harmful coping strategies are precursors to adverse long term human development impacts • Impacts on children and other vulnerable groups • Harmful intra-household coping • Coping strategies can be indicative of the stage and severity of a crisis • Hierarchies? • Household coping – common across aggregate shocks.

5. Increasing frequency of climate shocks Source: EM-DAT, The International Disaster Database, Centre for Research on the Epidemiology of Disasters • A green economy will continue to face crop failures, food price shocks, and others.

6. PEP CBMS: Kenya survey • Six sub-locations in Tana River district • 72 percent below the poverty line • Standard CBMS methodology: surveyed all households. • Covered 5882 households • Data collection: July 2009 to January 2010

7. 8 5 1 13 2 4 3 6 12 11 9 7 10 PEP CBMS: Philippines survey • Covered 13 barangays (districts), 4954 households. • Data collection: November 2008 to April 2009 Source: CBMS 2009

8. Fairly consistent surveys in the two countries asked about a range of coping strategies: Coping strategies

9. What (aggregate) shocks were the Kenyan households dealing with? Kenya: the attribution question

10. Results: Kenya • Evidence of harmful coping behavior. • Lower quintiles have much less access to credit, savings; more likely • to resort to harmful coping.

12. Results: Philippines

13. Philippines: Probit estimation

14. Panel data: 2702 households were interviewed in 2006. Philippines: the attribution question Appear to be hit by a large income shock, i.e. the Global Economic Crisis

15. also, self reported impact of the economiccrisis However, - Does not match self reported impacts of channels such as job losses, reduced hours and business losses. - As we saw, attribution questions in Kenya remain.

16. Other issues: • Absence of a baseline • - Is some of this behavior normal (borrowing) or seasonal (reducing • consumption)? • Intensity of harmful coping behaviour • - How frequently were meals skipped? • - Value of assets sold, borrowing. Room for improvement

17. Importance of well-designed safety nets • The vulnerable are coping in ways that reduce resilience. • Exposed in the face of aggregate, repeated shocks. • Act before it is too late • Important to monitor coping behavior to gauge the long term impacts of shocks on the most vulnerable, including intra-household effects. • Policy interventions to forestall these impacts, including expanding and adjusting safety nets. • New methods and technologies • Besides surveys, use mobile phones and internet technology. • UN Global Pulse – use data exhausts and detect ‘digital smoke signals’. Conclusions relevant to policy

18. Future Work: • Panel data collection 2011 • - Recovery from 2009 crisis impact. • Impact of 2010-2011 high food prices. • Guidance note • Continued monitoring

19. Thank youContact email:shivani.nayyar@undp.org