In both surveys, households were asked about the shocks that severely affected them during the previous five years from a list of preidentified categories of shocks. These include floods/drought, crop disease, livestock loss, severe illness, damage to household dwelling, water shortage, death of a household member, and so on. In addition to identifying the shocks they experienced, households were also asked about the estimated effect of the shock in monetary value as well as the coping strategies used to mitigate the impact of the shock. We use this information to estimate the effect of shocks on household welfare. This section focuses on describing the exposure of Sudanese households to shocks and profiling vulnerable households.

Agriculture-related shocks are most common in Sudan. Livestock loss and crop disease shocks affected 26 percent and 19 percent of Sudanese households in 2009, respectively. Other shocks commonly reported by Sudanese households include floods/droughts and illness/accident-related shocks. Nearly 15 percent of households reported these shocks in 2009 (see Figure 3b ). Since households were asked to identify the shocks that severely affected them in the previous five years from a list of common shocks, households can be affected by and can report more than one shock. Majority of Sudanese households report having been affected by a single shock, particularly in 2014/15 when 60 percent of households were affected by only one shock. In 2009, however, more households were affected by more than one shock—27 percent of households were affected by two shocks (compared to 24 percent in 2014/15) and 16 percent were affected by three shocks (compared to 11 percent in 2014/15 (see Figure 3a). In the absence of effective coping strategies and/or social protection programs, the effect of shocks on the welfare of households is likely to be large, particularly for households facing multiple shocks.

According to households’ own estimates of the impact of shocks, health-related shocks such as death of a household head and severe illness/accident and loss of livestock are the most severe shocks in Sudan, particularly in 2014/15. On average, households affected by severe illness/accident or death of the household head in 2014/15 reported an estimated effect of more than SDG 11,000 (equivalent to USD 240)<sup>6</sup> . Households affected by loss of livestock reported an average impact of more than SDG 10,000 (equivalent to USD 220) (see Figure 3c). The severity of health-related shocks and livestock loss is perhaps driven by the loss of income from economic inactivity due to illness/accident or death of the household head and loss of assets in the case of livestock loss-related shocks. As a result, these shocks result in significant welfare loss, particularly for households where these activities and assets form a significant component of household income or wealth.

Despite being available to relatively few households affected by shocks, help received is a common coping strategy among Sudanese households. Less than 35 percent of households affected by shocks in 2009 and less than 25 percent of those affected by shocks in 2014/15 reported that they relied on help received to cope with shocks (see Figure 3d). Although this indicates the presence of some form of social protection provided by family/friends, NGOs, and the government, only a handful of households affected by shocks have access to it. Furthermore, although there is little or no empirical evidence on the effectiveness of these systems of support in Sudan (at least to our knowledge), other studies have indicated that relying on these arrangements may further expose households to risk of welfare loss and poverty trap given that

> 6 This is based on a exchange rate of USD 1= SDG 45.11 obtained from the Central Bank of Sudan’s website- <u>https://cbos.gov.sd/en/exchange-rates.</u> Compared to measures of household welfare such as consumption per capita, these effects are fairly large. For instance, the average consumption per capita for the richest households in 2014 was SDG 12,776.

11