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The Environmental Impact of Poverty: Evidence from Firewood Collection in Rural Nepal

  • Jean-Marie Baland
  • Pranab Bardhan
  • Sanghamitra Das
  • Dilip Mookherjee
  • Rinki Sarkar

We investigate determinants of household firewood collection in rural Nepal, using 1995-96 and 2002-3 World Bank Living Standards Measurement Survey (LSMS) data. We incorporate village fixed effects, endogenous censoring, measurement error in living standards and heterogeneous effects of different household assets. We find no evidence in favor of the poverty-environment hypothesis. The evidence for the environmental Kuznets curve depends on the precise measure of living standards and time period studied. Firewood collections fall with a transition to modern occupations and rise with increasing population and household division. The local interhousehold collection externality is negligible, indicating that policy interventions are justified only by ecological considerations or nonlocal spillovers. (c) 2010 by The University of Chicago. All rights reserved.

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Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 59 (2010)
Issue (Month): 1 (October)
Pages: 23-61

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Handle: RePEc:ucp:ecdecc:v:59:y:2010:i:1:p:23-61
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  1. Bluffstone Randall A., 1995. "The Effect of Labor Market Performance on Deforestation in Developing Countries under Open Access: An Example from Rural Nepal," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 42-63, July.
  2. Lele, Sharachchandra M., 1991. "Sustainable development: A critical review," World Development, Elsevier, vol. 19(6), pages 607-621, June.
  3. Baland, Jean-Marie & Platteau, Jean-Philippe, 2000. "Halting Degradation of Natural Resources: Is There a Role for Rural Communities?," OUP Catalogue, Oxford University Press, number 9780198290612.
  4. Jeff Dayton-Johnson & Pranab Bardhan, 2002. "Inequality And Conservation On The Local Commons: A Theoretical Exercise," Economic Journal, Royal Economic Society, vol. 112(481), pages 577-602, July.
  5. Ekaterini Kyriazidou, 1997. "Estimation of a Panel Data Sample Selection Model," Econometrica, Econometric Society, vol. 65(6), pages 1335-1364, November.
  6. Duraiappah, Anantha K., 1998. "Poverty and environmental degradation: A review and analysis of the nexus," World Development, Elsevier, vol. 26(12), pages 2169-2179, December.
  7. repec:tpr:qjecon:v:118:y:2003:i:2:p:601-637 is not listed on IDEAS
  8. Amacher, Gregory S. & Hyde, William F. & Kanel, Keshav R., 1996. "Household fuelwood demand and supply in Nepal's tarai and mid-hills: Choice between cash outlays and labor opportunity," World Development, Elsevier, vol. 24(11), pages 1725-1736, November.
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