This paper attempts to examine the broad theoretical and empirical literature on how poor households respond to shocks to their incomes and livelihoods brought upon by natural disasters and by conflict. Natural disasters and other crises present formidable challenges to the fight against poverty and to the development of human capital. Specifically, they pose serious threats to populations living below, and near levels of absolute poverty and survival.
Households respond to circumstances brought upon by crises by altering several aspects of their lives; livelihood diversification, saving and dissaving, labour supply alterations to name a few. Underlying these observed changes are complex coping strategies that households employ based on the information and resources available to them, expectations of the future, and the opportunities and constraints operating in the external environment (such as the connectedness and functioning of markets, and public policy interventions).