Impact of land degradation on household poverty: evidence from a panel data simultaneous equation model

The debate on the land degradation – poverty linkages is inconclusive. However, the inter-linkages between land degradation and poverty are thought to be strong in the rural areas of low income countries where livelihoods predominantly depend on agriculture. This study seeks to contribute to the existing literature by establishing the causal relationships between poverty and land degradation and examines its magnitude using nationally representative panel data in Malawi and Tanzania. While using a simultaneous equation model and controlling for unobserved heterogeneity, the findings suggest that poverty contributes to land degradation as a result of poor households’ inability to invest in natural resource conservation and improvement. Land degradation in turn contributes to low and declining agricultural productivity, which in turn contributes to worsening poverty. Specifically, land degradation significantly increases the probability of household poverty by 35% in Malawi and 48% in Tanzania. Poor households have 69% and 67% more likelihood to experience land degradation in Malawi and Tanzania respectively. These findings suggest the importance of including land degradation perspective in poverty analysis among the rural households who heavily depend on land resources for their livelihoods. The pathways through which land degradation influence poverty should be explored so as to improving household welfare.