Working Paper
Vulnerability to natural shocks

Mozambique is among the most disaster-prone countries in the world. A bigger than usual, and mostly unexpected, flood occurred in the central-northern region of the country in the first few months of 2015, causing huge damage to infrastructures.

In this paper, we use a nationally representative household budget survey that was being carried out in the field during those months to assess the short-term impact of the 2015 flood on household consumption and poverty levels. Applying a difference-in-difference approach, we find that, for those exposed to the flood, consumption reduced significantly in the short term, in the range of 11–17 per cent, depending on the specification.

Poor households and households living in rural areas were affected significantly more. Poverty levels also increased due to the flood, by about 6 percentage points.

These results are relevant for policy planning, natural disaster management, and for ex ante vulnerability assessment in Mozambique and other risk-prone developing countries with similar characteristics.