Coping with climate shocks: The complex role of livestock portfolios

Abstract

• Livestock portfolios play a significant role, as an income and consumption buffering strategy during severe droughts. • The buffering potential of livestock varies by income quintile, length of the climate shock, animal species, and region. • Households face trade-offs between using livestock assets to smooth the effect of the shock or protect future income generation. • Livestock oriented resilience interventions should carefully consider the relationships among species, droughts, and socioeconomic groups. • This study employs a unique dataset combining socioeconomic and livestock asset data from 150 000 households with a multi-scalar drought index. The effects of climate change are alarming, with projections suggesting that weather events will become more extreme and frequent, affecting households in regions that are already highly vulnerable. This study explores the role of livestock as a household coping strategy against climate shocks. Using quantile regression analysis, we examine the potential of different animal species to buffer the effects of drought on income and consumption. We assemble a unique global dataset that combines household-level socioeconomic information with a multi-scalar climatic drought index. Our study confirms the significant, yet context-dependent, role of livestock portfolios as a buffering mechanism against the effects of drought on household income and consumption. The effect is driven by the specific type of animal species, length of the shock, and socioeconomic features. These findings could assist the design of livestock-oriented policy interventions. The novel contributions of this study include the first cross-country analysis of the buffering effect of livestock against drought; use of the standardized precipitation-evapotranspiration index as a multi-scalar drought indicator -; and a uniquely extensive dataset allowing for the analysis of interactions.