The impact of the 2015 El Niño-induced drought on household consumption: evidence from rural Ethiopia Author Tesfahun Asmamaw Kasie a , Birhan Sisay Demissie a , Mihret Jember Bahry a , Gashaw Mulu Gessesse b and Letenah Ejigu Wale

ABSTRACT
This paper evaluates the impact of the 2015 El Niño-induced drought on household consumption in
Ethiopia. A difference-in-difference method was used to compare consumption changes over time in a
group unaffected by the drought to the changes in a group affected by the drought. By using the ESS
household-level consumption aggregate data, we find that the 2015 drought reduces affected
household’s annual consumption by 8%, and the reduction was largely driven by changes in the lower
tails of the consumption distribution. Overall, we find a significant consumption decline due to the
2015 drought, and much of the decline has been experienced among the consumption poor,
indicating shock resilience inequality among rural households.

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