The Impacts of Climate Variability on Welfare in Rural Mexico

This paper examines the impacts of
weather shocks, defined as rainfall or growing degree days
more than a standard deviation from their respective
long-run means, on household consumption per capita and
child height-for-age. The results reveal that the current
risk-coping mechanisms are not effective in protecting these
two dimensions of welfare from erratic weather patterns.
These findings imply that the change in the patterns of
climatic variability associated with climate change is
likely to reduce the effectiveness of the current coping
mechanisms even more and thus increase household
vulnerability further. The results reveal that weather
shocks have substantial (negative as well as positive)
effects on welfare that vary across regions (North vs.
Center and South) and socio-economic characteristics
(education and gender). The heterogeneous impacts of
climatic variability suggest that a "tailored"
approach to designing programs aimed at decreasing the
sensitivity and increasing the capacity of rural households
to adapt to climate change in Mexico is likely to be more effective.