Abstract
Over the last decade, the frequency of floods has increased by over 75%. Sub-Saharan economies seem to have faced the brunt of these impacts, with countries like Malawi having experienced sixteen major flooding events and five storm disasters. These climatic phenomena threaten global economic stability. While most existing research focuses on the macroeconomic and sectoral understanding of structural transformation, emerging studies continue to reshape how it is understood and applied to microeconomics. Therefore, we seek to understand how climate shocks influence household-level structural transformation, and whether this relationship is homogeneous in the face of clean energy poverty. Using the case study of Malawi, this paper assesses the impact of flood shocks on the rate of household structural transformation across energy quantiles. We use climatic data from the University of East Anglia CRU and household data from the Integrated Household Survey (IHS5). Flood shocks are assumed to be exogenous to our model, and to correct for selection bias, we employ propensity score matching. Finally, the econometric analysis follows a fractional logit model as the principal analysis tool. Findings reveal that about 10,546 households that were exposed to severe floods had an increased rate of structural transformation of 24%. However, following the disaggregation of these results, only energy-rich households indicated a significant transformation of 30.2%. This suggests that climate mitigation techniques must be targeted at emboldening transitory efforts from agriculture to diverse industries, with a policy focus on addressing clean energy inaccessibility as a critical barrier.
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
2026 Special Focus—Unseen Unsustainability: Addressing Hidden Risks to Long-Term Wellbeing for All
KEYWORDS
Climate Shocks, Green Economics, Structural Transformation, Climate Adaptability, Household Resilience
