Modelling Farm Household Resilience to Income Shocks in Semi-Arid Nigeria: A Dynamic Panel Approach

Farm household resilience to income shocks, defined as the capacity to recover consumption and investment levels following adverse events, is a central concern of rural development policy in Nigeria's semi-arid zones, where weather variability, price shocks, and security disruptions interact to create complex vulnerability profiles. Existing resilience measurement approaches are predominantly cross-sectional and retrospective, limiting their capacity to capture the dynamic adjustment processes that distinguish resilient from vulnerable households. This study develops a dynamic panel model of farm household resilience to income shocks in semi-arid North West Nigeria, applied to a four-wave longitudinal dataset of 350 farming households in Sokoto, Zamfara, and Kebbi States spanning 2019 to 2024. The theoretical model draws on the dynamic stochastic general equilibrium framework adapted for agricultural household behaviour under incomplete markets, with resilience formalised as the rate of consumption rebound following a measured income shock. Shock exposure is measured using a combination of self-reported shock incidence, rainfall anomaly scores, and market price volatility indices. Dynamic panel GMM estimation is used to model consumption recovery trajectories controlling for household fixed effects. Results indicate significant heterogeneity in resilience: households with diversified income portfolios, livestock asset holdings, and formal savings accounts recover consumption to pre-shock levels within one season, while asset-poor monocrop households take an average of 2.8 seasons. Social network density is a significant resilience determinant through informal transfer mechanisms. The study contributes methodological and empirical advances to the literature on dynamic resilience measurement in semi-arid African farming systems. Keywords: farm household resilience, income shocks, dynamic panel, semi-arid Nigeria, consumption recovery