We bring together two strands of research that have thus far been developed independently: catastrophe risk modelling, and economic analysis of vulnerability to poverty. We focus on a specific example to fix ideas: the impact of drought hazard on the welfare of rural households in Ethiopia. The aim is to determine the validity of applying a derived set of damage (vulnerability) functions based on realized shocks and household expenditure/consumption outcomes, onto a forward-looking view of drought risk. We outline the contribution that combining the two analyses can bring, show preliminary results and outline future plans.
Porter,C., White, E. "The application of a probabilistic catastrophe risk modelling framework to poverty outcomes: General form vulnerability functions relating household poverty outcomes to hazard intensity in Ethiopia" Ferdi Policy Brief B120, November 2015