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Mining, Pollution and Agricultural Productivity: Evidence from Ghana

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Abstract

Most modern mines in the developing world are located in rural areas, where agriculture is the main source of livelihood. This creates the potential of negative spillovers to farmers through competition for key inputs (such as land) and environmental pollution. To explore this issue, we examine the case of gold mining in Ghana. Through the estimation of an agricultural production function using household level data, we find that mining has reduced agricultural productivity by almost 40%. This result is driven by polluting mines, not by input availability. Because of its crowding out effects on agriculture, we find that the mining activity is associated with an increase in poverty, child malnutrition and respiratory diseases. A simple cost-benefit analysis shows that the fiscal contribution of mining would not have been enough to compensate affected populations.

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  • Fernando Aragon & Juan Pablo Rud, 2012. "Mining, Pollution and Agricultural Productivity: Evidence from Ghana," Discussion Papers dp12-08, Department of Economics, Simon Fraser University.
  • Handle: RePEc:sfu:sfudps:dp12-08
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    1. repec:eee:jrpoli:v:54:y:2017:i:c:p:43-52 is not listed on IDEAS
    2. Alexander Lippert, 2014. "Spill-Overs of a Resource Boom: Evidence from Zambian Copper Mines," OxCarre Working Papers 131, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.

    More about this item

    Keywords

    Natural resources; Mining; Pollution;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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