Epsilon Archive for Student Projects

Abstract

As climate variability intensifies across Sub-Saharan Africa, smallholder farmers increasingly face the challenge of sustaining their livelihoods under recurrent drought conditions. This thesis examines how drought affects income composition and diversification among rural households in Namibia’s Zambezi region, using panel data collected in 2019 and 2023. It employs fixed-effects regression models to estimate the impacts of both objective drought indicators – such as precipitation and relative precipitation – and subjective measures based on self-reported drought exposure. Additional models explore interactions between precipitation and local soil conditions as well as longer-term income adjustments following the 2019 drought.
The findings reveal that precipitation shows limited explanatory power for changes in income structure, whereas self-reported drought is significantly associated with shifts in specific income sources. However, there is no evidence of increased income diversification, suggesting that households adjust within existing livelihood structures rather than expand into new ones. Moreover, the interaction model highlights that high sand content in the soil reduces the positive effects of rainfall on income.
These results underscore the importance of local perceptions and ecological conditions in shaping adaptive responses to climate shocks. They also point to structural barriers that limit transformation, such as poor market access and limited livelihood alternatives. These findings show the value of using farmer perceptions and environmental context – in this case soil quality – to better understand local drought impacts. Policy efforts should go beyond short-term relief and address the structural constraints that limit households' ability to adapt, such as limited access to markets, education, and income opportunities.