Learning the hard way? : adapting to climate risk in Tanzania

We use recent panel data on Tanzanian farm households to investigate how previous exposure to weather shocks affects the impact of a current shock. Specifically, we investigate the impact of droughts on agricultural outcomes and investments in children’s health, measured by their short- and long-term nutritional status. As expected, we find that droughts negatively impact yields, with the impact increasing in the severity of the shock, and that severe droughts have a negative impact on short-term nutritional outcomes of children. We also find suggestive evidence that the more shocks a household has experienced in the past, the less crop yields are affected by a current shock. This suggests that households are able to learn from their past shock experience, and could imply that households are able to adapt to climate risk. Our results also suggest that the impact of a shock depends on when the household last experienced a shock. In terms of child health, we are not able to detect any clear effect of previous shock exposure on the impact of a current shock, nor do we find any impact on long run nutritional outcomes.