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Deforestation and Smallholder Income: Evidence from Remittances to Nepal

Author

Listed:
  • Man Li
  • Wei Zhang
  • Zhe Guo
  • Prapti Bhandary

Abstract

This article examines the effect of remittance income on deforestation in Nepal during 2001–2010 using satellite-based land use data and a nationwide household survey. Results indicate that remittance income reduced deforestation by 4.2 percentage points, accounting for almost 12% of deforestation during this time. An additional 1,000 Nepalese rupee increase in average household annual remittance income reduced the ward-level deforestation by an approximate 0.435 percentage point. There is no evidence that remittances induced expansion of agricultural land or stimulated demand for forest products. Instead, remittances contributed to the shift of households’ demand for timber and fuelwood toward nonwood alternatives for housing construction and cooking.

Suggested Citation

  • Man Li & Wei Zhang & Zhe Guo & Prapti Bhandary, 2022. "Deforestation and Smallholder Income: Evidence from Remittances to Nepal," Land Economics, University of Wisconsin Press, vol. 98(2), pages 376-398.
    • Handle: RePEc:uwp:landec:v:98:y:2022:i:2:p:376-398
    Note: DOI: 10.3368/le.98.2.090220-0139R
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    More about this item

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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