Climate change is deepening household debt in rural India

As the planet warms due to more heat-trapping greenhouse gases in the atmosphere, the economic impact worsens, especially for those who are most vulnerable. In their article in the August issue of Climatic Change, authors Kandikuppa and Gray systematically examine the relationship between climate change and household debt in the livelihoods of rural Indians, a relationship that had not yet been studied extensively. In order to do so, the authors used the only comprehensive, publicly available, nationally representative panel study of Indians in existence: the India Human Development Survey. Specifically, they used the India Human Development Survey (IHDS), 2005 (ICPSR 22626) and the following round, the India Human Development Survey-II (IHDS-II), 2011-12 (ICPSR 36151), which was downloaded from Data Sharing for Demographic Research (DSDR). Of the sample of 41,554 households drawn in 2004–2005, 83% of the households were retained in 2011–2012. Kandikuppa and Gray included in their analysis 21,485 rural households that were surveyed in both rounds and that had borrowed at least once in either 2005 and 2011. They extracted household-level data on occupation, caste, landholdings, income, debt, and more. They also used village-level data on self-reported climate shocks such as droughts, floods, cyclones, and hailstorms, as well as data on the distance from key facilities like hospitals and banks. In conjunction with the IHDS data, the authors used climate data from NASA and agroecological data from the Indian Ministry of Agriculture to examine how household indebtedness evolved from 2005 to 2011 “under varying climate exposures, measured as season-specific 5-year climate anomalies and village-level shocks.” Kandikuppa and Gray found “pervasive effects . . . on multiple dimensions of household debt, particularly in arid and semi-arid areas.” They also found that “climate change interacts with existing socioeconomic differences—caste and landholding in particular—to deepen both the size and the depth of indebtedness for rural households.” Hundreds more publications making use of IHDS data are available here.