poverty (World Bank 2014, 24 and 113). Typically, these households resort to selling productive assets— livestock, land, and so on— (Deaton 1992; Dercon 2002); using savings (Paxson 1992); investing in lowrisk, low-return crop choices and asset portfolios (Rosenzweig and Binswanger 1993); and increasing labor supply by removing their children from school (Jacoby and Skoufias 1997; Kochar 1998; Morduch 1995), among others. The use of these strategies may have significant consequences on households’ poverty status and national poverty eradication achievements. For instance, where the use of these strategies depletes households’ stock of assets, savings, human capital, and so on or is insufficient to fully cushion the impact of shocks (Morduch 1995; Townsend 1995), households may be trapped in poverty, resulting in a cycle of intergenerational poverty. See Dasgupta (1993), Dercon (1996), and Dercon (2004) among others for empirical evidence on the effects of these strategies. Similarly, households marginally above the poverty line may be at risk of sliding back into poverty when affected by a shock. Jointly, these effects could lower national achievements in the fight against poverty.

To accelerate poverty reduction, it will be important to identify vulnerable households and help them become more resilient to common risks and shocks that may push them back into poverty. Effective measures should aim to (a) lower exposure to shocks by promoting the use of irrigation systems and drought-resistant seeds and diversification into less risky economic activities and (b) improve coping mechanisms, such as cash transfer programs or other financial instruments, to complement existing informal safety nets. To inform these reforms, there is a need to empirically examine the vulnerability of Sudanese households through the lens of (a) the level of exposure to negative shocks, (b) the extent of impacts of shocks on household welfare, and (c) the type of coping mechanisms available to the household—including access to social protection programs. It is also useful to examine these caveats along the lines of different types of shocks—covariate and idiosyncratic shocks—as well as factors which affect the extent of exposure to shocks such as location and occupation or livelihood.

This paper uses this framework to examine the effect of shocks on the welfare of Sudanese households. By estimating the impact of various shocks on measures of household welfare as well as the strategies used to cope with shocks, a profile of households most vulnerable to shocks can be built through their characteristics—occupation/livelihood, gender of head, poverty status, and location. We consider both self-reported idiosyncratic shocks such as death/sickness of household members, loss of livestock, crops, or assets, and so on and covariate shocks such as deviation of rainfall from historical average to indicate flood/drought, conflict, and so on. In addition to identifying the characteristics of households most vulnerable to shocks, the paper also aims to highlight the shocks with most impact on household welfare while accounting for the heterogeneity of the impact across households based on wealth, livelihood, location, and access to safety nets/social protection programs.

# 2.1. Shocks in Sudan

This section discusses the exposure and vulnerability of Sudanese households to shocks beginning with the 2009 NBHS followed by the 2014/15 National Household Budget and Poverty Survey (NHBPS) , which gives a more recent picture. It describes the main types of shocks reported by households overall as well as the differences in the prevalence of shocks across rural/urban areas, states, household livelihoods, and quintiles of household per capita consumption. To complement this description of exposure to shocks across households, this paper profiles households most likely to be vulnerable to shocks based on statistical differences in the characteristics of households affected by shocks and those not affected.

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