Climate adaptation actions, like any other investment, require financial resources, which are likely to be in short supply in the rural sector in developing countries. This paper assesses the role of credit constraints in the choice of adaptation strategies in settings with severe financial market imperfections. Household-level panel data from selected zones in the highland region of Ethiopia, combined with climate information from the adjacent meteorological stations, is employed in the analysis.

Using household-plot level panel data from the Nile Basin of Ethiopia, this article applies a random effects ordered probit endogenous switching regression model to empirically investigate the impact of weather events and other conditioning factors on farmers’ choice of tillage intensity and the effect of changing tillage frequencies on differences in farm returns. Results indicate that, while low frequency tillage is more likely in drier areas, plot-level shocks (such as pests and diseases) are key variables in the choice of high-frequency tillage.

The paper examines the impact of the Ethiopia’s Productive Safety Net Program on household dietary diversity and child nutrition using both waves of the Ethiopian Socio-economic Survey.
Key messages
• The Productive Safety Net Program is not found to have any impact on dietary diversity or child nutrition, however, it does help reduce household food insecurity.
• A nutrition-sensitive social protection program should be implemented.
• To improve child nutrition, social benefits can be made conditional on parents’ participation in nutrition education programs.

Individuals’ risk preferences may change after experiencing external socio-economic or natural shocks. Theoretical predictions and empirical studies suggest that risk taking may increase or decrease after experiencing shocks. So far the empirical evidence is sparse, especially when it comes to developed countries. We contribute to this literature by investigating whether experiencing financial and health-related damage caused by storms affects risk preferences of individuals in Germany.

We investigate the role of an indigenous social network in Ethiopia, the iddir, in facilitating factor market transactions among smallholder farmers. We use detailed longitudinal household survey data and employ fixed effects estimation approaches to identify the effect of iddir membership on factor market transactions among farmers. We find that joining an iddir network improves households’ access to land, labour and credit transactions.

We estimate the production function for agricultural output in Eastern Africa incorporating climate variables disaggregated into growing and non-growing seasons. We find a substantial negative effect of within growing season variance of precipitation. We simulate predicted climate change for the region and find a resulting output reduction of between 1.2% and 4.5%.