Does the Environment Matter for Poverty Reduction? : The Role of Soil Fertility and Vegetation Vigor in Poverty Reduction
The debate on the environment-poverty nexus is inconclusive, with past research unable to identify the causal dynamics. This paper uses a unique global panel data set that links (survey and census derived) poverty data to measures of environmental...
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| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/732471533299978428/Does-the-environment-matter-for-poverty-reduction-the-role-of-soil-fertility-and-vegetation-vigor-in-poverty-reduction http://hdl.handle.net/10986/30227 |
| Summary: | The debate on the environment-poverty
nexus is inconclusive, with past research unable to identify
the causal dynamics. This paper uses a unique global panel
data set that links (survey and census derived) poverty data
to measures of environmental quality at the subnational
level. The analysis uses vegetation vigor as a proxy for
above-ground environmental quality and soil fertility as
proxy for below-ground environmental quality. Rainfall is
used to account for endogeneity issues in an instrumental
variable approach. This is the first global study using
quasi-experimental methods to uncover to what degree
environmental quality matters for poverty reduction. The
paper draws three main conclusions. (1) The environment
matters for poverty reduction. The panel regression suggests
that a 10 percent increase in vegetation vigor is associated
with a poverty headcount ratio reduction of nearly 0.7
percentage point in rural areas, and 1 percentage point in
Sub-Saharan Africa. A 10 percent increase in soil quality
leads to a roughly 2 percentage point decrease in poverty
rates in rural areas and in Sub-Saharan Africa. (2) The
effects of environmental quality on poverty are stronger
than its effects on average income, suggesting that the poor
benefit disproportionately from environmental quality. (3)
In situ environmental quality improvements are pro-poor, in
contrast to urbanization. Although urbanization has highly
significant and sizable correlations with GDP per capita, it
is not significantly correlated with poverty reduction. |
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