Vulnerability tends to be a term that is used rather loosely, consequently it is often confused with, or used as a synonym for, ultra-poverty (being unable to meet even minimum food needs); or its descriptive meaning varies with the context in which it appears. Here, vulnerability is taken to mean both that people experience high risk of events that have adverse impacts on their livelihoods, and that their ability to deal with risky events when they occur is impaired. Risky events, or shocks as they are often called, can occur individually (accident, illness, death) or community-wide (drought, floods, plant or animal diseases). Ability to deal with them when they occur, and thus avert livelihood collapse, depends much on asset status at household level. A household with strong and diverse assets (land, family labour, savings, livestock, tools etc.) is better able to cope with a shock than a household with weak or depleted assets.

Note that both sides of the vulnerability definition are relevant: the degree of risk of adverse events occurring, and the inability to cope. High risk on its own is not a good indicator of vulnerability (for example, for families that have plentiful resources and many options), and depleted assets would less often lead to livelihood failure in a low risk environment. It follows that vulnerability rises either due to rising risk, or to falling ability to cope, or some combination of both those factors. People become more vulnerable over time due to insufficient rebuilding of assets after each successive shock. This can occur for many reasons including depletion of key assets needed to generate a living (e.g. lack of able-bodied labour), lack of opportunity for generating cash incomes (perhaps due to stagnation or decline of the national economy), poor agricultural performance, and shorter time intervals between shocks. Poverty predisposes people to vulnerability, and the deeper and more persistent the poverty the more this is the case.