Household's coping strategies and recoveries from shocks in Vietnam

• Household's shock recoveries are estimated via discrete time proportional hazard model.
• Rural households are not prone to economic shocks because they have limited access to markets.
• Physical assets affect positively on faster recoveries but human capita does not show strong effect.
• Coping strategies help recovery faster but they are usually applied to severe shocks and by richer households.
• There is a high heterogeneity between household characteristics and perceived shock covariates.

There has been a great deal of the literature on the effects of shocks on a household's well-being as well as on the choice of ex-ante and ex-post strategies in the context of risk exposure. However, researchers have paid little attention to the ability of a household to recover from an adverse event. Additionally, the livelihood of those in the developing world has been increasingly affected by macroeconomic instabilities and extreme weather conditions. This study aims to investigate the forces that shape a household's recovery from misfortune. The analyses are applied to the case of Vietnam by using data collected from household surveys from years 2007 to 2010 and a discrete time proportional hazard model to find the determinants of the shock recovery. The results show that a household's characteristics do not strongly determine the shock recovery but physical assets do. Shocks covariates such as more losses and higher severity make the misfortune harder to recover from. Additionally, coping strategies sometimes help poor households recover better from the losses.