Natural Capital and Poverty Reduction

Problem & Objective
In many countries poor households turn to resource extraction to generate income, manage risk and secure livelihoods. However, this strategy that prevents them from participating fruitfully in other activities and escaping their poverty. This project will document the ways in which natural capital serves as informal insurance and a safety net against income variability and transitory shocks. It will also examine household dependence on natural resources, and how this varies with wealth, gender and market conditions. Finally, it will look at whether income from natural resources can serve as a pathway out of poverty by helping households accumulate physical, financial and human capital.

Research Context
Income from resource extraction accounts for up to 45% of total income for rural households in some countries. The importance of resource extraction is amplified in the presence of risk, which will likely increase as climate change threatens productivity, especially in marginal agricultural areas.

Policy Relevance
Improved information about how households use natural resources and their role in income generation and risk management will help governments generate natural resource management policies that will not disadvantage the poor. In addition, researchers will look at the long term sustainability of resource extraction, and will look to inform policies in directions that improve both economic and environmental outcomes. The project will work to hi light ways to ensure that a larger share of resource rents go to local people, and articulate ways to enhance poverty alleviation without increasing environmental degradation.

Publications

• Angelsen, A. 2008. "Seeing Both the Forest and the Trees in REDD." Forthcoming in International Forestry Review.

• Babigumira, R., A. Angelsen and D. Müller. 2007. "An Integrated Socio-economic Study of Deforestation in Western Uganda, 1990-2000." In Land use Change: Science, Policy and Management, edited by R. Aspinall and M. Hill. New York: CRC Press (Taylor and Francis).

• Debela, Bethelhem Legesse. 2009. Forest Resources, Income Diversification and Economic Shocks in Uganda. Unpublished MSC Thesis, Department of Economics and Resource Management, Norwegian University of Life sciences (UMB), Ås, Norway.

• Fikru K. Alemayehu, Fikru K. 2009. Income Risk and Covariance of Incomes: Evidence from Uganda. Unpublished MSC Thesis, Department of Economics and Resource Management, Norwegian University of Life sciences (UMB), Ås, Norway.

• Fisher, M. and G. Shively. 2007. "Improved Agricultural Technology and Tropical Forest Pressure: The Case of Malawi's Starter Pack Scheme." Journal of Agricultural and Resource Economics 32(2): 349-362.

• Jumbe C.B.L. and A. Angelsen. 2007. "Has Forest Co-management in Malawi Benefited the Poor?" In Political Institutions and Development: Failed Expectations and Renewed Hopes, pp. 171-199. Global Development Network Series, Edward Elgar, Cheltenham, UK.

• Jumbe, C. and A. Angelsen. 2007. "Forest Dependence and Participation in CPR Management: Empirical Evidence from Forest Co-management in Malawi." Ecological Economics 62(3-4): 661-672.

• Khunde, Fydess. 2009. How do Forest-Based Livelihoods Matter to Rural Households? Evidence from Charcoal Producers in Uganda. Unpublished MSC Thesis, Department of Economics and Resource Management, Norwegian University of Life sciences (UMB), Ås, Norway.

• Kijima, Y., K. Otsuka and D. Sserunkuuma. 2008. "Assessing the Impact of NERICA on Income and Poverty in Central and Western Uganda." Agricultural Economics 38: 327-37.

• Rios, A., W. Masters and G. Shively. 2008. "Linkages between Market Participation and Productivity: Results from a Multi-Country Farm Household Sample." American Agricultural Economics Association Annual Meeting, Orlando, 27-29 July.

• Tadesse, G. and G. Shively. 2009. "Food Aid, Food Prices, and Producer Disincentives in Ethiopia" American Journal of Agricultural Economics 91(4): 942-55. This publication is available for those registered with the Wiley InterScience website.

• Tran, N. A., G.E. Shively and P.V. Preckel. "A New Method for Detecting Outliers in DEA." Forthcoming in Applied Economics Letters.

• Weber, B., A. Marré, M. Fisher, R. Gibbs, and J. Cromartie. 2007. "Education's Effect on Poverty: The Role of Migration." Review of Agricultural Economics 29(3): 437-445.

• Project Proposal (PDF, 35 pages)