# 4. Results

## 4.1. Main results

Tables 4.1 to 4.3 show results for continuous measures of hazard anomalies for the three cropping livelihood zones of maize, highland, and roots and lowland. Each table shows results for linear, quadratic, and cubic measures of soil moisture, vegetation (NDVI), evapotranspiration (SPEI), total seasonal rainfall, and WRSI; notes to each table indicate which countries and years are included. The impact of the hazard is estimated and presented separately for households with and without land to reflect the difference in the degree to which households are likely to be impacted by the hazard.<sup>15</sup> There are three important conclusions from these results. First, not all measures perform equally well at capturing the occurrence of the shock, to the extent that welfare is positively and significantly correlated with good weather conditions and negatively affected by weather shocks for households with land. Of the four measures, soil moisture and NDVI appear to give more precise and consistent results across specifications, with soil moisture offering the most consistent results across livelihood zones. SPEI, total seasonal rainfall and WRSI provide much less consistent results. Total seasonal rainfall often provides counterintuitive results, as does SPEI in some specifications. WRSI is often not significant.

Second, although nonlinearities are known to be present in the relationship between weather and agricultural production, we do not observe a consistent nonlinear pattern across regression results. This could simply reflect the fact that we are looking at the relationship between weather and consumption rather than agricultural production where non-linear effects are well established (e.g., Lobell, Schlenker and Costa-Roberts 2011). It could also reflect the fact that non-linearities are already part of the index construction in some cases. For example, WRSI weights losses in rainfall differently based on when they occur and NDVI, by capturing vegetation should, already capture the non-linear impact of weather conditions on yields. Another reason for not observing a consistent non-linear pattern could be that we have few household survey observations at extreme values of the anomaly which is where observations would be needed to pick up non-linear effects.

In the maize livelihood zone some nonlinearity is present: there is a stronger relationship between hazard anomalies and welfare in the middle of the distribution (where anomalies and therefore welfare changes are smaller) and a smaller impact of anomalies on welfare at the tails of the distribution. A steeper relationship is also observed in the quadratic and cubic specification for the roots and lowland livelihood zone, but no tapering off for negative values (Figures 4.1 and 4.2). Despite being significant in this case, the squared and cubic terms do not indicate much nonlinearity in the relationship. Nonlinearities are much more important when using the total rainfall measure; this makes sense because this measure does not reflect any nonlinear relationship between rainfall and crop production in how it is constructed. In these cases, the nonlinearity indicates a larger impact on welfare as the anomaly becomes bigger and more negative, and a smaller impact on welfare as the anomaly becomes more positive, even turning negative for very large values of total rainfall that may reflect waterlogging and flooding.

Third, for soil moisture negative impacts are felt for both landed and landless households with no consistent pattern of who is most affected. For the highlands and NDVI measures in roots and tubers livelihood area, there is a strong and significant impact on landed households, but little impact on landless households. Overall, though given the relatively similar impact in many specifications it suggests that using weather variation in a 20km radius includes the impact of the weather on immediate labor markets.

15 The term “hazard” as used here includes the full distribution of the weather anomaly used—that is, positive and negative events, not just events that cause welfare losses according to the definition of hazard.

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