The Impact of Exogenous Shocks on Households in the Pacific : A Micro-Simulation Analysis

Cororaton, Caesar B. ; Knight, David S.

World Bank Group, Washington, DC

关键词: ABSOLUTE POVERTY;    ADVERSE EFFECT;    AGRICULTURAL COMMODITIES;    AGRICULTURAL ECONOMICS;    AGRICULTURAL LAND;   

DOI  :  10.1596/1813-9450-7046
RP-ID  :  WPS7046

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper seeks to provide evidence onthe extent of household vulnerability to exogenous economicshocks in the Pacific region and consider policy optionsthat help to manage this risk. Characteristics of the regionsuch as remoteness, small size, dispersion, and urbanizingpopulations lead to pronounced vulnerabilities. The paperpresents macroeconomic and distributional analysis andcomplements it with results of a micro-simulation modelcustomized for this work based on a model used previously bythe World Bank to analyze the impacts of the Food and FuelPrice Crisis. The results of micro-simulations serve tohighlight the very high levels of economic vulnerabilityfaced in the region. Impacts of economic shocks are notconfined to well-off individuals, but have major impacts onthe poor. Even moderate shocks are likely to push sizeablefractions of the population below the poverty line. Theshocks considered are not worst case scenarios, but thosethat can and have occurred frequently. The results show thathouseholds are hard hit by increases in oil prices,especially in remote islands where freight costs are higher,while countries on aggregate, and individual households, areexposed to volatility in the prices of the one or twoimported food commodities that they depend on. Livelihoodsare also often driven by external demand. In particular,many poor households in countries like Papua New Guinea havelivelihood strategies centered on cash crops. The resultspoint to the importance of helping households of the Pacificto manage the risk inherent in their lives while prudentlyusing macroeconomic tools at the disposal of the government.