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Environmental resources reduce income inequality and the prevalence, depth and severity of poverty in rural Nepal

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  • Bir Chhetri
  • Helle Larsen
  • Carsten Smith-Hall

Abstract

This paper investigates the economic importance of environmental income to rural households in Nepal and how environmental income influences poverty and inequality measures. Qualitative contextual information was collected from two village development committees in middle Gorkha District followed by a structured survey of 303 randomly selected households; income data were collected quarterly throughout 2008. Average environmental income was 15.7 % of total household income, ranging from 11.0 to 29.5 %. Environmental reliance decreased with rising income while absolute environmental income increased. Ordinary least square regression analysis indicated that households having large areas of crop and other lands, many livestock, larger amount of bank saving and having at least one migrating household member generate significantly larger amount of total household income. Households having a larger household size and the Dalit households generate significantly lower amount of total household income. Poverty indices and Gini decomposition showed that excluding environmental income from total household income has a large negative impact on the proportion of households below poverty lines, the income shortfall as a proportion of poverty lines and the variation in income distribution among households below the poverty lines. Copyright Springer Science+Business Media Dordrecht 2015

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  • Bir Chhetri & Helle Larsen & Carsten Smith-Hall, 2015. "Environmental resources reduce income inequality and the prevalence, depth and severity of poverty in rural Nepal," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 17(3), pages 513-530, June.
    • Handle: RePEc:spr:endesu:v:17:y:2015:i:3:p:513-530
    DOI: 10.1007/s10668-014-9557-2
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    9. Oli, Bishwa Nath & Treue, Thorsten & Smith-Hall, Carsten, 2016. "The relative importance of community forests, government forests, and private forests for household-level incomes in the Middle Hills of Nepal," Forest Policy and Economics, Elsevier, vol. 70(C), pages 155-163.
    10. Madsen, Sofia Topcu & Smith-Hall, Carsten, 2023. "Wild harvesting or cultivation of commercial environmental products: A theoretical model and its application to medicinal plants," Ecological Economics, Elsevier, vol. 205(C).
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    12. Zhu, Zhen & Xu, Zhigang & Shen, Yueqin & Huang, Chenming & Zhang, Yaoqi, 2019. "How off-farm work drives the intensity of rural households' investment in forest management: The case from Zhejiang, China," Forest Policy and Economics, Elsevier, vol. 98(C), pages 30-43.
    13. Jifei Zhang & Chunyan Liu & Craig Hutton & Hriday Lal Koirala, 2018. "Geographical Dynamics of Poverty in Nepal between 2005 and 2011: Where and How?," Sustainability, MDPI, vol. 10(6), pages 1-24, June.
    14. Jude Ndzifon Kimengsi & Mukong Alfred Kechia & Balgah Roland Azibo & Jürgen Pretzsch & Jude Kwei, 2019. "Households’ Assets Dynamics and Ecotourism Choices in the Western Highlands of Cameroon," Sustainability, MDPI, vol. 11(7), pages 1-16, March.
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