The application of a probabilistic catastrophe risk modelling framework to poverty outcomes: General form vulnerability functions relating household poverty outcomes to hazard intensity in Ethiopia

Disaster Risk Financing and Insurance (DRFI) Workshop Presentation

Researchers bring together two strands of research that have thus far been developed independently: catastrophe risk modelling, and economic analysis of vulnerability to poverty.  We focus on a specific example to fix ideas: the impact of drought hazard on the welfare of rural households in Ethiopia. The aim is to determine the validity of applying a derived set of damage (vulnerability) functions based on realized shocks and household expenditure/consumption outcomes, onto a forward-looking view of drought risk. We outline the contribution that combining the two analyses can bring, show preliminary results and outline future plans.