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One of the motivations frequently cited by Sen and Nussbaum for moving away from a utility metric towards a capabilities framework is a concern about adaptive preferences or conditioned expectations. If utility is related to the satisfaction of aspirations or expectations, and if these are affected by the individual’s previous experience of deprivation or wealth, then utility cannot provide a basis for assessing well-being, equality or social justice which is independent of the initial distribution. This paper contributes to the identification of adaptive expectations by using ten years of panel data from the British Household Panel Survey to study the process of adaptation based on the individual’s own previous experience. Subjective assessments of financial well-being at time t, for individuals with a given income level, are compared according to the income trajectory of the individual over the previous one to nine years. Descriptive statistics are followed by multivariate analysis, introducing controls for changes in need (family size and composition, disability), and possible social reference groups (for example, ethnicity and employment status). Fixed effects regressions allow for individual variation in the scaling of satisfaction. The results show that year on year, individuals who have experienced a fall in income since the previous year are less satisfied than those who have a steady income, suggesting that subjective assessments may be made in comparison with previous experience. Surprisingly, individuals who have experienced an increase in income are also less satisfied. This suggests that income is a poor proxy for satisfaction but it does not provide firm evidence for the existence of adaptation over the short term. Over a longer period, those who have experienced falling incomes are less satisfied than those who have had constant income, while those who have experienced rising incomes are no more satisfied than those who have had constant incomes. This suggests that over a longer period, adaptation to changes in income is asymmetric: people adapt to rising incomes but less so falling incomes. The paper concludes that satisfaction with income is influenced by objective circumstances, and to changes in objective circumstances, in complex ways. In particular, the process of adaptation to rises in income masks long-term differences in outcomes for individuals and makes subjective assessments of well-being a flawed basis for judgements of inequality or social justice. An objective normative standard, such as is offered by the capabilities framework, avoids social evaluations being unduly influenced by individuals’ past experiences. [ABSTRACT FROM AUTHOR]

Ugandan territory is a challenging environment for agriculture due to extreme climate events. These are likely to harm the development of rural communities. Crop diversification and off-farm activities are considered potential adaptation strategies to reduce the impacts of climate risk. This paper explores three main issues. The first one is the frequency and the intensity of climate shocks that push households to diversify their portfolio of livelihood options. The second one is about the market and the institutional factors that enhance the context where farmers can effectively diversify against adverse climate events. The last issue concerns the mix of crop and income diversification that minimises the welfare variability and the downside risk. To address these points, the study exploits four rounds of the Ugandan National Panel Survey and the SPEI climatic index to estimate a panel multinomial endogenous switching model. Results demonstrate that farmers' diversification response to the climate shocks is not linear. Moreover, the empirical analysis shows that a medium crop diversification maximises mean welfare, while a mix of high crop and income diversification generates the largest impact on the downside risk reduction. Social and human capital are crucial to improve the chance of an effective diversification-based adaptation. • Diversification of crop species and off-farm income sources can help rural farmers mitigating adverse climatic events. • A Panel multinomial endogenous switching model is estimated with socioeconomic and climate shocks data in Uganda. • Farmers diversify if with high frequencies of past shocks in the mid--run, while they prefer specialisation in the shortrun. • Medium diversification improves the average welfare; high diversification insures against risk and extreme welfare losses. • Social capital is crucial to enhance the effectiveness of diversification strategies. [ABSTRACT FROM AUTHOR]

This paper explores the historical relationship between weather fluctuations and mortality evolution in China. Using panel data on the annual provincial mortality rate and daily weather variables for the 1964–2008 period, we applied a dynamic model structure with sufficient controls to estimate the short-term effects of temperature shocks on China's mortality rate. Our main results show that an additional 1 °C rise in average temperature in a given year increases the annual mortality rate by an average of 3.2%. In addition, days with daily average temperatures exceeding 27 °C (30 °C) are associated with an increase in the annual mortality rate of nearly 0.1% (0.2%) or approximately 9,520 (19,040) additional deaths. In contrast, extremely cold days do not have these effects. By applying a hybrid model structure (the long difference approach) to examine the medium-term effects of temperature changes, we find that there is little evidence of overall adaptation to high temperatures when moving from the short term to the medium term. In addition, by introducing interactions between temperatures and potential modifiers such as access to doctors, hospital beds, air conditioning and refrigerators, we determined that only residential air conditioning played an important role in mitigating the temperature-mortality relationship. However, the penetration of air conditioning in China is still relatively low. These findings indicate that climate change could partially explain the historical phenomenon of China's rising mortality rate during the unprecedented economic boom experienced since the 1980s. • Increases in the number of extreme hot days increase annual mortality rate. • Little evidence of adaptation when moving from short run to medium run. • Residential air conditioning has played an important role in mitigating the temperature-mortality relationship. [ABSTRACT FROM AUTHOR]