Vulnerability to natural shocks

Mozambique is among the most disaster-prone countries in the world. A bigger than usual, and mostly unexpected, flood occurred in the central-northern region of the country in the first few months of 2015, causing huge damage to infrastructures. 

In this study, we use a nationally representative household budget survey that was being carried out in the field during those months to assess the short-term impact of the 2015 flooding on household consumption and poverty levels. 

Applying a difference-in-difference approach, we find that, for those exposed to the flood, consumption reduced significantly in the short term, in the range of 11–17%, depending on the specification, on the estimation procedure implemented or on the sub-sample of households selected.

Poorer households, and especially households living in rural areas, seem to have been affected significantly more. Poverty levels also increased due to the flood, by about 6 percentage points. 

These results are relevant for policy planning and natural disaster management, as well as for ex-ante vulnerability assessment in Mozambique and other risk-prone developing countries with similar characteristics.

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