Short-term consumption behavior, seasonality, and labor market uncertainty in rural India

The following conclusions are drawn. Uncertainty regarding short-term income causes a family to significantly reduce its consumption, while predictable seasonal income volatility has no such effect. On the whole, rural households respond more to transitory or unanticipated income than to permanent income, and this is more true of landless households than of cultivating households. Illness causes great uncertainty, along with labor demand deficiency. The labor revenue sources of the rural households depresses consumption expenditure. The high volatility in revenue sources seems to affect low-income households more. These conclusions indicate the need for appropriate food and income stabilization policies. (Author abstract)