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Determinants of migration and environmental spillovers of IBLI

Aug 05, 2015

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Lance Robinson
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Page 1: Determinants of migration and environmental spillovers of IBLI
Page 2: Determinants of migration and environmental spillovers of IBLI

WhataretheenvironmentalimpactsofIBLI?• Index‐based livestock insurance (IBLI) important approach to address crucial source of livelihood risk to pastoralists on the arid and semi‐arid lands (ASALs).

• However, policymakers and implementing partners have been concerned about systemic effects of introducing IBLI.

• In particular, could IBLI induce increased herd accumulation and more intensive grazing patterns, in a fragile ecosystem?

Page 3: Determinants of migration and environmental spillovers of IBLI

WhataretheenvironmentalimpactsofIBLI?Grant: The Human and Environmental Impacts of Migratory Pastoralism in Arid and Semi‐arid East Africa, Australia Development Research Awards Scheme 2012 (ADRAS) by Dept. of Foreign Affairs and Trade, Australia.

Key partners include Cornell University, ILRI, and US Dept of Agriculture. 

Core team includes computer scientists, economists, and rangeland scientists. 

Page 4: Determinants of migration and environmental spillovers of IBLI

WhataretheenvironmentalimpactsofIBLI?Two key aspects:1. Better understanding how pastoralists choose where 

and when to move their livestock2. Studying how these might change in presence of Index‐

Based Livestock Insurance (IBLI)

“This project seeks to generate a number of policy‐relevant results on the feedbacks between migrant pastoralism and the environment, including addressing the impacts of new index insurance products.”

Page 5: Determinants of migration and environmental spillovers of IBLI

Howdopastoralistschoosewhereandwhentomovetheirlivestock?Determinants of Migration

Page 6: Determinants of migration and environmental spillovers of IBLI

Wherewouldyoumove?• ASAL pastoralists face regular dry seasons in which they migrate to remote water and forage locations.• Migrate dozens or even hundreds of kilometres.

• How do pastoralists decide where to move?

Face tradeoffs between• Distance (energy costs for animals)• Availability of water• Availability of forage• Security risks• Etc…

Page 7: Determinants of migration and environmental spillovers of IBLI

Wherewouldyoumove?

village

?

?

?

Page 8: Determinants of migration and environmental spillovers of IBLI

Understandingmovementchoicesisimportantforpolicy• Many policy and investment choices have spatial aspects: e.g., land use policy, constructing waterpoints, providing access to food aid or market opportunities, etc.

• When it comes to movement, margins of adjustment are very discrete.

“This project seeks to generate a number of policy‐relevant results on the feedbacks between migrant pastoralism and the environment, including addressing the impacts of new index insurance products.”

Page 9: Determinants of migration and environmental spillovers of IBLI

Itisnottrivialtomeasuremovementchoices• Pastoralists cover vast distances, over inaccessible terrain.

• Most existing work based on self‐reported movements.

• Measurement innovation: team includes expertise in satellite‐based measurement of livestock movements through GPS collars.• Collect location at 5‐minute intervals.

Page 10: Determinants of migration and environmental spillovers of IBLI

GPSCollars

Page 11: Determinants of migration and environmental spillovers of IBLI

Several Globules of Concentrated Use

HighPotentialforEnvironmentalImpact

Linear, Trailing Features

LimitedForagingExtent

EachGlobuleCentered AroundaWateringPoint.

GlobularMovementPattern

Page 12: Determinants of migration and environmental spillovers of IBLI

FurtheraugmentingtheGPScollardata• Household characteristics (household surveys, implemented by ILRI teams)

• Locations of resources• Forage (satellite data on NDVI)• Water (various methods to construct maps of waterpointlocations)

• This allows us to pull together these data sources for analysis.

Page 13: Determinants of migration and environmental spillovers of IBLI

Availabilityofresources

Page 14: Determinants of migration and environmental spillovers of IBLI

Selectionofresources

Page 15: Determinants of migration and environmental spillovers of IBLI

MakingSenseoftheData:modelsneeded!• In order to make sense of the data, our team has been applying a number of modelling approaches.

• A model allows us to understand how pastoralists trade off (1) distance, (2) resources (water, forage), etc.

• Well‐fitted models can also allow us to make policy predictions:• How would herd movements change in response to policy interventions such as IBLI, waterpoint construction, changes in food distribution, conflict reduction, etc.?

• How would herd movements change in response to changes in environment (e.g., climate)?

Page 16: Determinants of migration and environmental spillovers of IBLI

Findingssofar(Ermonetal,2015)• Current paper primarily considers the choice of pastoralists over which (remote) satellite camp to locate at.

• We can explain movement choices with a relatively simple model (few variables).

• Results intuitive, e.g., herders are especially sensitive to movement distance.

• Potential to leverage this kind of model to conduct other policy simulations.

Page 17: Determinants of migration and environmental spillovers of IBLI

HowdoesIBLIchangelivestockmovementchoices?Environmental Spillovers

Page 18: Determinants of migration and environmental spillovers of IBLI

HowdoeshavingIBLIchangethings?1. Will access to IBLI change herd size? • Assumption that movement by larger herds will lead to greater environmental (vegetation) degradation.

1. Will access to IBLI change herd movement patterns?• Assumption that more intensive movement will lead to greater 

environmental (vegetation) degradation.

“This project seeks to generate a number of policy‐relevant results on the feedbacks between migrant pastoralism and the environment, including addressing the impacts of new index insurance products.”

Page 19: Determinants of migration and environmental spillovers of IBLI

Whywouldweexpectbehaviourstochange?• In principle, because IBLI is index‐based, it should remove concerns about moral hazard, and it should reduce the need to self‐insure through livestock (“precautionary savings”).

• However …1. Insurance, in a setting with few investment 

opportunities, makes livestock a more attractive investment, by changing the risk profile.

2. Movement effort may serve as costly self‐insurance, an incentive which IBLI may reduce.

3. People may misunderstand how insurance works.

Page 20: Determinants of migration and environmental spillovers of IBLI

Time

Livestock

Drought Drought

Herdsizesfollowboom‐and‐bustcyclesbetweennormalweatherandshocksduetodrought

Page 21: Determinants of migration and environmental spillovers of IBLI

Time

Livestock

Drought Drought

Weatherindexinsurancecouldflattenoutthiscycle

Page 22: Determinants of migration and environmental spillovers of IBLI

Whatwedo(Tothetal,2014)• Identify impacts of IBLI on herd accumulation and herd movement by randomizing the provision of IBLI amongst pastoralist communities in southern Ethiopia.

• Measure herd size and movement over 2011‐2015 using GPS collars, household surveys, and complementary data.

• Compare herd sizes and movement patterns (e.g., distance travelled) in households with and without IBLI.

Page 23: Determinants of migration and environmental spillovers of IBLI

Findings:herdaccumulation• We find that cattle herd sizes increase: about 7 cows for the average herd size of 30.

• We find that the effect is significantly stronger for individuals who score higher on an index of baseline understanding of IBLI.

• This is a net effect, not offset by reductions in other livestock (camels, shoats, etc).

Increase in asset attractiveness seems to dominate precautionary savings for households who best understand IBLI.

Page 24: Determinants of migration and environmental spillovers of IBLI

Findings:movement• We find that herd movement becomes more intensive and concentrated: average distance moved decreases by 3‐5%.

• This is further strengthened for greater understanding of IBLI.

• Households visit less waterpoints and spend more time at a given waterpoint.

Could suggest that IBLI substitutes for precautionary movement effort.

Page 25: Determinants of migration and environmental spillovers of IBLI

Whatdoesitmean?• Results are consistent with emerging work from Kenya being conducted by colleagues: IBLI may lead to a decrease in herd size in the short run, but an increase in the long run.

• However, there are significant caveats:• Small sample sizes• Working with populations very early in experience curve with IBLI• Many margins of adjustment as program scales (internal and external)

Something to keep tracking as IBLI scales