Abstract:
The objective of the dissertation was to evaluate the impact of environmental shocks on household
incomes. Rwanda, like many countries, is affected by changes in climate, these effects permeate
through to incomes of households in the country considering the extent to which households in
Rwanda depend on the environment. The study attempts to assess the effect of environmental
shocks on household welfare represented by household consumption in Rwanda. Using regression
analysis with data from EICV4, this study reveals a negative and significant impact of
environmental shocks on household welfare in the country whereby the environmental shocks
reduces the overall household welfare by 4 percent. The findings also show that there are other
factors which significantly affect household welfare such as savings, education levels and health
status of household members. The results suggest what common sense does: “Since the
environmental shocks that often result in disasters such as extinction of species, depletion of
resource stocks, or destruction of ecosystems, the government of Rwanda in collaboration with
other countries should devise policies that are environmentally-friendly and more specifically that
aims at protecting the environmental and mitigate the risks in case of environmental shocks.
Although some of these policies exist already, they could be enhanced by national awareness as
well as promoting selective investments that are not disastrous to the environment.”
