Long term increases in rural incomes and productivity in Ethiopia are threatened by weather fluctuations. Changes in weather variability and the number of extreme weather events (specifically droughts) has the capacity to undermine development efforts if it translates into decreased food availability and incomes. This study integrates downscaled daily weather data with household surveys to study the impact of weather and temperature on rural household welfare in Ethiopia. Our panel data econometric approach is one of the first to measure the impacts of weather on household consumption directly. Generally, we find that food and non-food consumption are a function of weather in Ethiopia, and that this link is lessening over time but more pronounced for poor households. Evidence from these survey villages suggests that being in a vulnerable area may not actually result in being worse off relative to being poor in a non vulnerable area. These findings have implications for focusing climate mitigation strategies on the poor regardless of location rather than just the poorest regions.
