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Poverty and the Environment-Exploring the Relationship between Household Incomes, Private Assets and Natural Assets

Author

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  • Urvashi Narain

    (Resources for the Future, Washington DC)

  • Shreekant Gupta

    (Delhi School of Economics)

  • Klaas vant Veld

    (University of Wyoming, Laramie)

Abstract

Using purpose-collected survey data from 535 households in 60 different villages of the Jhabua district of India, this paper investigates the extent to which rural households depend on common-pool natural resources for their daily livelihood. Previous studies have found that resource dependence-- defined as the fraction of total income derived from common-pool resources--strongly decreases with income. Our study uncovers a more complex relationship. Firstly, for the subsample of households that use positive amounts of resources, we find that dependence follows a U-shaped relationship with income, declining at first but then increasing. Secondly, we find that the probability of being in the subsample of common-pool resource users follows an inverse U-shaped relationship with income - the poorest and richest households are less likely to collect resources than those with intermediate incomes. Resource use by the rich is therefore bimodal - either very high or--for the very rich households--zero. Thirdly, we find that resource dependence increases at all income levels with an increase in the level of common-pool biomass availability. The combination of these results suggests that the quality of natural resources matters to a larger share of the rural population than had previously been believed, common-pool resources contribute a significant fraction of the income not just of the desperately poor, but also of the relatively rich.

Suggested Citation

  • Urvashi Narain & Shreekant Gupta & Klaas vant Veld, 2005. "Poverty and the Environment-Exploring the Relationship between Household Incomes, Private Assets and Natural Assets," Working papers 134, Centre for Development Economics, Delhi School of Economics.
  • Handle: RePEc:cde:cdewps:134
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    References listed on IDEAS

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    1. Reddy, S. R. C. & Chakravarty, S. P., 1999. "Forest Dependence and Income Distribution in a Subsistence Economy: Evidence from India," World Development, Elsevier, vol. 27(7), pages 1141-1149, July.
    2. Beck, Tony & Nesmith, Cathy, 2001. "Building on Poor People's Capacities: The Case of Common Property Resources in India and West Africa," World Development, Elsevier, vol. 29(1), pages 119-133, January.
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    6. Adhikari, Bhim & Di Falco, Salvatore & Lovett, Jon C., 2004. "Household characteristics and forest dependency: evidence from common property forest management in Nepal," Ecological Economics, Elsevier, vol. 48(2), pages 245-257, February.
    7. Fisher, Monica, 2004. "Household welfare and forest dependence in Southern Malawi," Environment and Development Economics, Cambridge University Press, vol. 9(02), pages 135-154, May.
    8. Edward B. Barbier, 2005. "Natural Resource-Based Economic Development in History," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 6(3), pages 103-152, July.
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    Citations

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    Cited by:

    1. Thondhlana, Gladman & Muchapondwa, Edwin, 2014. "Dependence on environmental resources and implications for household welfare: Evidence from the Kalahari drylands, South Africa," Ecological Economics, Elsevier, vol. 108(C), pages 59-67.
    2. Parvin Sultana, 2011. "Implications of floodplain aquaculture enclosure," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 55(9), pages 1159-1174, October.
    3. 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.
    4. Eskander, Shaikh M.S.U. & Barbier, Edward B., 2017. "Tenure Security, Human Capital and Soil Conservation in an Overlapping Generation Rural Economy," Ecological Economics, Elsevier, vol. 135(C), pages 176-185.
    5. López-Feldman, Alejandro, 2014. "Shocks, Income and Wealth: Do They Affect the Extraction of Natural Resources by Rural Households?," World Development, Elsevier, vol. 64(S1), pages 91-100.
    6. World Bank, 2007. "Poverty and Environment : Understanding Linkages at the Household Level," World Bank Other Operational Studies 7744, The World Bank.
    7. Naidu, Sirisha C., 2011. "Access to benefits from forest commons in the Western Himalayas," Ecological Economics, Elsevier, vol. 71(C), pages 202-210.
    8. Glenk, Klaus & Barkmann, Jan & Schwarze, Stefan & Zeller, Manfred & Marggraf, Rainer, 2006. "Differential Influence of Relative Poverty on Preferences for Ecosystem Services: Evidence from Rural Indonesia," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25681, International Association of Agricultural Economists.
    9. Anthon, Signe & Lund, Jens Friis & Helles, Finn, 2008. "Targeting the poor: Taxation of marketed forest products in developing countries," Journal of Forest Economics, Elsevier, vol. 14(3), pages 197-224, June.
    10. Belcher, Brian M., 2005. "Forest Product Markets, Forests and Poverty Reduction," Conference Proceedings 2005 124400, Crawford Fund.
    11. Eskander, Shaikh M.S.U & Barbier, Edward B., 2015. "Tenure security and soil conservation in an overlapping generation rural economy," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205225, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    12. Antoci, Angelo & Russu, Paolo & Ticci, Elisa, 2009. "Distributive impact of structural change: Does environmental degradation matter?," Structural Change and Economic Dynamics, Elsevier, vol. 20(4), pages 266-278, December.
    13. Babulo, Bedru & Muys, Bart & Nega, Fredu & Tollens, Eric & Nyssen, Jan & Deckers, Jozef & Mathijs, Erik, 2009. "The economic contribution of forest resource use to rural livelihoods in Tigray, Northern Ethiopia," Forest Policy and Economics, Elsevier, vol. 11(2), pages 123-131, March.
    14. World Bank, 2007. "Poverty and Environment : Understanding Linkages at the Household Level," World Bank Publications, The World Bank, number 6924, January.
    15. repec:ris:badest:0566 is not listed on IDEAS
    16. Taruvinga, Amon & Mushunje, Abbyssinia, 2012. "Buffer zone income dynamics for the sub-district producer community: Implications for rural off-farm income, income inequality and the development of household agriculture," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126377, International Association of Agricultural Economists.
    17. Kyriaki Remoundou & Fikret Adaman & Phoebe Koundouri & Paulo Nunes, 2014. "Is the value of environmental goods sensitive to the public funding scheme? Evidence from a marine restoration programme in the Black Sea," Empirical Economics, Springer, vol. 47(4), pages 1173-1192, December.
    18. World Bank, 2005. "India : Unlocking Opportunities for Forest-Dependent People in India, Volume 2, Appendixes," World Bank Other Operational Studies 8414, The World Bank.
    19. Shaikh M.S.U. Eskander & Edward B. Barbier & Benjamin Gilbert, 2018. "Fishing and Nonfishing Income Decisions: The Role of Human Capital and Family Structure," Land Economics, University of Wisconsin Press, vol. 94(1), pages 114-136.
    20. Robinson, Elizabeth J.Z. & Lokina, Razack B., 2011. "A spatial-temporal analysis of the impact of access restrictions on forest landscapes and household welfare in Tanzania," Forest Policy and Economics, Elsevier, vol. 13(1), pages 79-85, January.
    21. Adam, Y.O. & Eltayeb, A.M., 2016. "Forestry decentralization and poverty alleviation: A review," Forest Policy and Economics, Elsevier, vol. 73(C), pages 300-307.
    22. repec:eee:ecoser:v:14:y:2015:i:c:p:56-66 is not listed on IDEAS
    23. van 't Veld, Klaas & Narain, Urvashi & Gupta, Shreekant & Chopra, Neetu & Singh, Supriya, 2006. "India's Firewood Crisis Re-examined," Discussion Papers dp-06-25, Resources For the Future.

    More about this item

    Keywords

    India; Madhya Pradesh; poverty; environment; common-pool natural resources; rural households;

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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