The paper is organized as follows. Section 2 reviews the literature on the micro-level impacts of extreme weather impacts. Section 3 describes the data and provides descriptive statistics. Section 4 explains our empirical approach to studying the household-level impacts of the 2015 floods in Malawi. Section 5 discusses the results and Section 6 concludes.

# **2. Literature Review**

The primary impact of weather shocks on rural households’ welfare is through impacts on crop production. Due to data limitations, only a limited number of studies have attempted to uncover the impacts of extreme weather events on crop production at the household level. Michler et al. (2016), using panel data from Zimbabwe, find that extreme weather events have significant negative impacts on crop yields; descriptive statistics show that average yields in extremely low rainfall years were about 34 percent lower than in normal years. Similarly, Wineman et al. (2017), using panel data from Kenya, find that extremely low rainfall conditions result in a 29 percent decrease in the value of crop production per adult equivalent.<sup>3</sup> Estimates of flood impacts on crop production, and in particular those that are based on panel data sets, are more scarce. Del Ninno et al. (2001), using cross-sectional data collected after the largescale 1998 floods in Bangladesh, document crop losses of 42 to 62 percent for the flood-affected households, with many households losing their entire harvest.

Several studies attempt to estimate the impacts of extreme weather on a range of household welfare outcomes, most often those that are linked to consumption. Wineman et al. (2017) find that very low rainfall lowered income per adult equivalent per day by 18.3 percent. And while calories per adult equivalent per day were not affected on the whole, the share originating from own crop and livestock production was lower, and the share of purchased calories was higher as a result of the low rainfall shock. Del Ninno et al. (2001) show that though overall food expenditures were not affected by flood intensity, expenditures on calorie-dense foods fell, as did calorie consumption per capita for most flood-affected household categories, except for the most severely hit. The authors hypothesize that food aid may have helped households in the most severely-hit areas to maintain caloric intake.

Other studies estimate a 5 to 19 percent drop in consumption expenditures subsequent to a weather shock (Arouri et al., 2015 in Vietnam; Baez et al., 2016 in Guatemala; Christiansen and Dercon, 2007 and Dercon et al., 2005 in Ethiopia). Premand and Vakis (2010) document that households in Nicaragua that experienced a drought over three years were 10 percent more likely to remain impoverished four years later, while Reardon and Taylor (1996) show that the poverty rates in the Sudanian zone of Burkina Faso, and in the drier Sahalian zone were 12 to 15, and 2 to 19 percentage points higher, respectively, after the 1984-85 droughts.

> 3 Fafchamps et al. (1998) use panel data collected in six villages in Burkina Faso, where the sampled villages experienced at least two years of extremely low rainfall compared with the long-term average. The authors find the expected negative impacts of low rainfall on the value of crop production, though the authors do not report the size of these impacts.

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