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Eike Luedeling
Katie Downie
Jan De Leeuw
Keith Shepherd
 Research for
development only has
impact if it leads to
better decisions
 In supporting decisions,
how can we effectively
consider resilience?
Image: http://www.mynamesnotmommy.com
 Various complex and dynamic definitions:
response to shocks and stressors
 Rarely directly observable
 Most resilience models are complex, data-
demanding and error-prone
 Data is scarce in most places of interest
 Difficulties in operationalizing the concept
 If resilience matters, it should have
measurable impacts
 Among several systems, the most resilient
should do best in the long run most of the
time, when exposed to shocks and stressors
 We have to find out which one this is –
quickly, cheaply, with imperfect
information and yet accurately to meet
demands of decision-makers…
Well-established business decision
analysis approach
Recommendations for optimizing decision
Plausible distribution of net benefits
Hubbard 2014. How to measure anything – the value of intangibles in business.Wiley.
Measurements if needed
Identify high-value variables
Participatory development of a comprehensive business-case
model for a decision (all relevant costs, benefits, risks)
Decision-makers define the current state of uncertainty
Simulation of the range of plausible
decision outcomes, considering all relevant
risks
Water
pipeline
Rainfed agriculture
interventions
Borehole
management
 100-km pipeline for fresh water supply to
rapidly growing dryland city
 Taps a politically sensitive aquifer
Image: http://www.mercycorps.org
 Intensive discussions with stakeholders
 Model-building with group of experts
Image: http://www.mercycorps.org
Key uncertainties
• Number and value of a surviving infants
• Value of disease treatment
• Reduced performance due to poor
design
• Risk of political interference
• Very risky project, when considering potential shocks
• High chance of failure
• Key uncertainties related to limited stakeholder
inclusion, investor priorities and values
 High livestock mortality (up to 80%) during
drought
 Better managed boreholes could alleviate
this problem
 Model built based on literature and expert
knowledge
Key uncertainties
• Discount rate
• Milk price
• Livestock mortality reduction
• Herd growth rate
• Milk yield per cow in non-drought years
• Fairly safe bet, low chance of losses
• Key uncertainties could be reduced through
socioeconomic and market surveys
 Portfolio of large-scale interventions
 Improved soil management, water resource
management, intensification of trees, mixed
livestock and grazing
 Model built based on stakeholder
consultation and expert workshops
Image: http://www.rspb.org.uk/
Key uncertainties
• Cost per ton of CO2
• Profits from land in semi-arid zone
• Profits from land in sub-humid zone
• Additional CO2 from intensive farms
• Number of people who won’t migrate
• Substantial gains and losses possible
• High information values (100s of millions USD)
• Farming profitability studies and migration studies
Image: http://www.rspb.org.uk/
 High-level models can often provide sufficient
information to guide decision-making for
specific decisions
 Comprehensiveness is more important than
high mechanistic detail
 Long-term stochastic model runs allow direct
simulation of outcomes
 High-value variables are often not the ones
typically measured
 Engagement with decision-makers increases
likelihood that results will be used
An Applied Information Economics Approach to Assessing Resilience in the Horn of Africa

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An Applied Information Economics Approach to Assessing Resilience in the Horn of Africa

  • 1. Eike Luedeling Katie Downie Jan De Leeuw Keith Shepherd
  • 2.  Research for development only has impact if it leads to better decisions  In supporting decisions, how can we effectively consider resilience? Image: http://www.mynamesnotmommy.com
  • 3.  Various complex and dynamic definitions: response to shocks and stressors  Rarely directly observable  Most resilience models are complex, data- demanding and error-prone  Data is scarce in most places of interest  Difficulties in operationalizing the concept
  • 4.  If resilience matters, it should have measurable impacts  Among several systems, the most resilient should do best in the long run most of the time, when exposed to shocks and stressors  We have to find out which one this is – quickly, cheaply, with imperfect information and yet accurately to meet demands of decision-makers…
  • 5. Well-established business decision analysis approach Recommendations for optimizing decision Plausible distribution of net benefits Hubbard 2014. How to measure anything – the value of intangibles in business.Wiley. Measurements if needed Identify high-value variables Participatory development of a comprehensive business-case model for a decision (all relevant costs, benefits, risks) Decision-makers define the current state of uncertainty Simulation of the range of plausible decision outcomes, considering all relevant risks
  • 7.  100-km pipeline for fresh water supply to rapidly growing dryland city  Taps a politically sensitive aquifer Image: http://www.mercycorps.org  Intensive discussions with stakeholders  Model-building with group of experts
  • 8. Image: http://www.mercycorps.org Key uncertainties • Number and value of a surviving infants • Value of disease treatment • Reduced performance due to poor design • Risk of political interference • Very risky project, when considering potential shocks • High chance of failure • Key uncertainties related to limited stakeholder inclusion, investor priorities and values
  • 9.  High livestock mortality (up to 80%) during drought  Better managed boreholes could alleviate this problem  Model built based on literature and expert knowledge
  • 10. Key uncertainties • Discount rate • Milk price • Livestock mortality reduction • Herd growth rate • Milk yield per cow in non-drought years • Fairly safe bet, low chance of losses • Key uncertainties could be reduced through socioeconomic and market surveys
  • 11.  Portfolio of large-scale interventions  Improved soil management, water resource management, intensification of trees, mixed livestock and grazing  Model built based on stakeholder consultation and expert workshops Image: http://www.rspb.org.uk/
  • 12. Key uncertainties • Cost per ton of CO2 • Profits from land in semi-arid zone • Profits from land in sub-humid zone • Additional CO2 from intensive farms • Number of people who won’t migrate • Substantial gains and losses possible • High information values (100s of millions USD) • Farming profitability studies and migration studies Image: http://www.rspb.org.uk/
  • 13.  High-level models can often provide sufficient information to guide decision-making for specific decisions  Comprehensiveness is more important than high mechanistic detail  Long-term stochastic model runs allow direct simulation of outcomes  High-value variables are often not the ones typically measured  Engagement with decision-makers increases likelihood that results will be used