PDF_logo Economic Shocks and Coping Strategies: Evidence from Bangladesh

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Economic Shocks and Coping Strategies: Evidence from Bangladesh

Paper No:45

Author:Meherun Ahmed, M.A. Baqui Khalily and Mehadi Hasan



Households move strategically to smooth consumption in the event of economic shocks. This paper comprehensively analyzes various coping schemes adopted by households in the event of different types and intensity of economic shocks. We conclusively find that erosive coping is a dominant  strategy for households for all types of shocks except for the case of asset shocks. It is also evident that the higher the total loss suffered, the greater is the likelihood of adopting erosive coping schemes for any of the three economic shocks. Contrary to the findings related to asset shocks, the household is highly likely to adopt erosive savings and help from relatives in case of economic shocks. In addition to these two methods, households also mortgage land or take up new loans when it encounters expenditure shocks. The households is more prone to adopt multiple strategies in case of income and expenditure shocks.

Key Words: Coping Strategies, Economics Shocks, Erosive Coping

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