Vulnerability to poverty and climate variability in Nicaragua

What is it about?

This study considers the effect of climate variability on vulnerability to poverty in Nicaragua. It discusses how such vulnerability could be measured and which heterogeneous effects can be expected. A multilevel empirical framework is applied, linking per capita consumption to household, regional and climate characteristics. Results confirm a negative effect of climate variability on consumption per capita of Nicaraguan households. This suggests the need for stronger public policies and more resources in order to adapt to the effect of climate change. Furthermore, the poverty reduction attainments reached since the 1990s could be jeopardized if this vulnerability persists.

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Why is it important?

Climate variability has important consequences for households in Nicaragua, and therefore the topic should be seriously considered. Despite the general trend of reduction of poverty in the country, evidence of climate effects is still concentrated mostly in rural areas where it is a potential threat to welfare. Results of this study show the negative impact of changes in precipitation and temperature over the last eight years on household income and consumption per capita in Nicaragua. This study shows that temperature change has a negative effect on households’ consumption and there is a need for a policy to reduce its impact. We also found evidence of regional differences on the effects caused by temperature variability. F

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