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Modeling and Understanding the Interrelationship between Natural Resource Extraction, Poverty and Inequality: The Case of Forestry in Sub-Saharan Nigeria
Abstract
Many rural households in developing countries derived their income partly from forest extraction yet, very little is known about the distributional implications of this income source on poverty and household welfare in general. Applying Gini and poverty decomposable techniques to community level datasets in rural Nigeria for analyzing the distributional implications of forest income on household welfare, the study finds that forest income reduces both income inequality and poverty. 2-step Ordinary Least Square (OLS) analysis of the determinants of forest income indicates that the decision to participate in forest extraction increases with more access to natural forest areas, larger and poorer households; and decreases with membership in forestry management and higher educational attainment. Furthermore, poverty simulations revealed that poverty can be reduced in the short run, through programs that raise the price that households receive for minor forest products. However, in order to synergize forest-led poverty reduction and forest conservation, the study recommends the planting and use of minor forest products outside of the natural forest areas. Other policy options and implications of the study are fully discussed.
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