Covariant shocks and their marginal effects on household coping strategies in Uganda
This study analyzed covariant shocks and their marginal effects on household coping strategies in Uganda. Household level data contained in the Uganda National Household Survey (2005/2006) by Uganda Bureau of Statistics was used. The dependent variable was coping strategies with options; used assets, used savings, reduced family expenditure, widened employment, sought help, borrowed and other strategies. The independent variables were; drought, floods/hailstorm, pest attack, bad seed quality, livestock epidemics and other shocks. Location, region, gender, age, household size, economic status and education were used as control variables. Analysis was carried out using SPSS 12 and STATA 12 that generated preliminary descriptive statistics, variable cross tabulations, chi-square and multinomial logistic results. Three models were estimated to find out the effect of covariant shocks and their marginal effects on coping strategies. Out of the total number of 7421 respondents, 4885 (65.8%) reported to have faced at least one shock. Out of six shocks, drought was the largest specific shock that affected most respondents followed by; floods, livestock epidemics and a combination of other shocks combined. Based on the results of the cross tabulation and chi-square test, the conclusion is that there were significant differences in reporting shocks by; location, region, gender, household size and economic status but no significant difference in reporting shocks according to education status. For the first choice strategy, there were significant differences in the choice of strategies between gender, location, region, household size, economic status; but no significant difference between education status. The choice of coping strategies was significantly different for various shocks. For the second choice strategy, there were significant differences in the choice of strategies based on, region, household size, economic status and location; but no significant difference between male and female. For the third choice strategy, there were no significant differences in the choice of strategies. Households were more likely to use savings in face of drought, floods/hailstorms, pest attacks, bad seed quality and other shocks. Male headed households were more likely to widen employment compared to use of savings than females. Use of savings to cope in face of shocks has policy implications in relation to the need to raise household savings.