Drought shocks, adaptive strategies, and vulnerability to relative poverty

This paper explores the impact of drought shocks on the vulnerability to relative poverty of farm households based on the fixed-effects model using Chinese micro-household data. Further, we examine the effectiveness of different adaptive strategies in mitigating the adversely impacts of drought. The results show that drought shocks suffered by farm households during the growth season will significantly increase household vulnerability to relative poverty and the probability of farm households falling into relative poverty in the future increases. The results of the mechanism analysis indicate that drought shocks affect household vulnerability to relative poverty mainly by affecting household income, health status, and production behavior. The results of heterogeneity analysis revealed that households in poor areas as well as low-income households are more affected by drought shocks. With adaptive strategies such as engaging in off-farm employment, joining farmer cooperatives, and using digital financial inclusion tools, the negative impacts of drought shocks are significantly mitigated.