An assessment of households’ vulnerability to economic shocks in south western Nigeria

Abstract

High level of vulnerability of small-scale farmers and poor rural households to economic shocks occasioned by the economic policies of the Federal Government of Nigeria often hampers their effective participation in economic activities. Even though, social protection programmes are often advocated for reducing the vulnerability to economic shocks and stresses, lack of information of the determinants of households’ vulnerability often limit the effectiveness of such programmes. This study was therefore designed to carry out an assessment of vulnerability of households to economic shocks. Data used for the study were collected from one hundred and twenty (120) households. Descriptive statistics, economic vulnerability index and multiple regression analyses were used to analyse the data. With a value of 0.703, the economic vulnerability index shows that households are about 70% vulnerable to economic shocks. The results also show that the significant variables affecting households’ vulnerability to economic shocks are the gross annual income and expenditure accounting for more than 70% of households’ vulnerability as indicated by the Coefficient of Multiple determination R2 = 0.711. The study shows that economic vulnerability of the households is high and recommends that government should help in ensuring stabilisation in prices of commodities and provision of soft loans to households for consumption and production needs.

Keywords

• Household
• Economic shocks
• Vulnerability index
• Multiple regression
• Ondo state