Weathering shocks: Unraveling the effects of short-term weather shocks on poverty in Paraguay

This study analyzes the extent to which short-term weather shocks have affected incomes and poverty in Paraguay. The research design exploits variation in weather shocks across districts and time, using ordinary least squares pooled regression analysis.

The results show that heat shocks led to significant household income reductions: 5 percent in urban areas and up to 8.8 percent in rural areas, on average. Heat shocks also increased poverty by 1.7 and 4.2 percentage points in urban and rural areas, respectively. Floods primarily affected urban areas, increasing poverty by 1.9 percentage points.