Lisa Rees Department of Agricultural Economics University of Missouri-Columbia December 5, 2008

What is the Impact of Livelihood Strategies on Farmers’ Climate Risk Perceptions in the

Bolivian Highlands?

Lisa ReesDepartment of Agricultural EconomicsUniversity of Missouri-ColumbiaDecember 5, 2008

Introduction• Risk Management Strategies Climate Risk Perceptions

• Ordinal Logistic Regression▫ Dread▫ Diversification▫ Access to Credit▫ Climate Knowledge

• Focus Groups conducted▫ Weather/Climate Change▫ Weather Event Severity▫ Ex-Ante Risk Management Strategies▫ Ex-Post Risk Management Strategies

Objectives

• Main objective- Understand how farmers’ climate risk perceptions are impacted by livelihood strategies▫ Perceptions are linked to their assets (financial

capital and social capital) within their livelihood

• Specific objective 1- Identify and describe farmers’ climate risk perceptions of climate hazards▫ Identify differences by region

Literature• Livelihood and Risk Management Strategy

▫ Livelihoods are created by livelihood resources natural capital, financial capital, human capital and social capital

▫ Ex-Ante Risk Management Strategies (Morduch, 1995) Diversification Off-Farm Income

▫ Ex-Post Risk Management Strategies (Morduch, 1995 Credit Insurance

• Risk Perception▫ Psychometric model is risk perception being a function of the

properties of the hazard (Sjoberg, 2000)▫ Slovic (1987) identified dread and unknown

Conceptual Framework

Household

RiskManagement

Actual Risk Level Risk Perception

Unknown

Dread

Risk Attitude

LivelihoodStrategies

Unknown

Dread

Initial Risk Perception

TIME

Hypotheses• H1: diversified portfolio lower climate risk

perceptions

• H2: access to credit lower climate risk perceptions

• H3: access to climate information lower climate risk perceptions

• H4: lower dread feelings lower climate risk perceptions

Overview of Ancoraimes & Umala

Altiplano

A. B.

C. Ancoraimes D. Umala

LakeTiticaca Ancoraimes

Umala

Chinchaya

Kellhuiri

San José de Llanga

San Juan Cerca

Vinto Coopani

Chojňapata

CohaniKarcapata

Calahuancani

Lake Titicaca

La Paz

Objective vs. Subjective Risk

•Garcia, Raes, Jacobsen and Michel (1997)

SubjectiveObjective Subjective ObjectiveNorth 3.88 30% 3.81 40%Central 4.29 18% 4.72 58%Combined 4.085 24% 4.265 49%

Flood Drought

Focus Group FindingsWeather/Climate ChangeHazard Severity

•Experience Weather/Climate Change▫Umala- drier conditions, more wind, lower

temperatures and fewer frosts▫Ancoraimes- drier conditions

•Weather Event Severity▫hail, frost, drought

Focus Group FindingsEx-Ante Risk Management Strategies

•Frost and Hail- rituals•Planting in three different areas

▫Umala Frost- chemicals, varieties Drought- planting multiple times Flooding- higher elevation, vertical furrows

▫Ancoraimes Relatives Drought- certain areas, higher elevation,

plow deep, store more products

Focus Group FindingsEx-Post Risk Management Strategies•Rituals•Can’t Cope

▫Umala Institutions, government Children- jobs Migrate Works for neighbors

Drought- chuno▫Ancoraimes

Don’t ask government Migrate

Model•Other Income + Total Cattle + Total

Sheep + Location + Dread + Access to Credit + Shock Experience + Contact Family Outside + Spanish Speaking Climate Risk Perceptions

Ordinal Logistic Regression FindingsB S.E. Sig

Dependent Variable Moderate Climate Risk Perception- 1 -2.667 1.197 0.026

Low High-2 -0.117 1.140 0.918

Mid-High-3 1.463 1.136 0.198

High-4 3.008 1.164 0.010

Extreme-5 -

B Odds Ratio S.E. Sig

Parameter Estimates

Other Income (Bolivianos) -0.005 0.995 0.002 0.013 **

Sheep 0.005 1.005 0.009 0.581

Cattle 0.018 1.018 0.077 0.819

Chinchaya -2.034 0.131 1.047 0.052 *

Karcapata -0.580 0.560 1.300 0.656

Chojñapata -2.173 0.114 1.271 0.087 *

San Jose Llanga 1.728 5.632 1.109 0.119

San Juan Circa 2.427 11.326 1.368 0.076 *

Vinto Coopani 1.485 4.415 1.132 0.190

Kellhuiri 2.259 9.569 1.271 0.075 *

Calahuancani 0.977 2.657 1.254 0.436

Cohani - - - -

Ordinal Logistic Regression FindingsLow Dread- 6 -1.220 0.295 1.439 0.396

Dread-7 -1.626 0.197 1.968 0.409

Dread- 8 -2.670 0.069 0.620 0.000 ***

Dread- 9 -0.722 0.486 0.448 0.107

Dread-10 - - - -

Access to Credit -0.870 0.419 0.435 0.046 ** No access - - - -

High Experience Shocks- 5 -0.680 0.507 2.213 0.759

Shocks-6 1.140 3.128 0.754 0.131

Shocks-7 1.099 3.001 0.433 0.011 **

No experience shocks-8 - - - -

Contact family outside -5.405 0.004 2.151 0.012 **

No contact family outside - - - -

Spanish speaking 0.594 1.811 0.641 0.354

Not able to speak Spanish - - - -

Conclusion• Significant Explanatory Variables

▫ Diversification- income ▫ Access to credit▫ Trusted Knowledge

• Non-Significant Explanatory Variables▫ Dread▫ Livestock

• Further Research▫ Gender▫ Individual hazards▫ Rituals

References•Morduch, J. (1995). "Income Smoothing

and Consumption Smoothing." The Journal of

•Economic Perspectives 9(3): 103-114.

•Slovic, P. (1987). “Perception of Risk.” Science 236: 280-285.

•Sjoberg, L. (2000). "Factors in Risk Perception." Risk Analysis 20(1): 1-12.