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Droughts, Biodiversity, and Rural Incomes in the Tropics

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  • Frederik Noack
  • Marie-Catherine Riekhof
  • Salvatore Di Falco

Abstract

Poverty and biodiversity are concentrated in rural areas of developing countries where incomes fluctuate with seasons and weather extremes. In this paper, we quantify the income stabilizing role of natural biodiversity and forests for rural households in developing countries. We use panel data covering 7,556 households in 23 developing countries, combined with gridded data on droughts, data on natural biodiversity, and data on the timing of the agricultural cycle. We find that droughts during the growing season reduce crop incomes but that these negative shocks are partly offset by increased incomes from forest extraction. We also find that the negative impact of droughts on rural incomes declines with increasing levels of natural biodiversity. An increase in biodiversity by one standard deviation reduces the impact of droughts on rural production to almost zero. These results therefore stress the importance of biodiversity and natural resources for the stability of rural incomes.

Suggested Citation

  • Frederik Noack & Marie-Catherine Riekhof & Salvatore Di Falco, 2019. "Droughts, Biodiversity, and Rural Incomes in the Tropics," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(4), pages 823-852.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/703487
    DOI: 10.1086/703487
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    Cited by:

    1. François Bareille & Pierre Dupraz, 2020. "Productive Capacity of Biodiversity: Crop Diversity and Permanent Grasslands in Northwestern France," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(2), pages 365-399, October.
    2. Frederik Noack & Ashley Larsen & Johannes Kamp & Christian Levers, 2022. "A bird's eye view of farm size and biodiversity: The ecological legacy of the iron curtain," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1460-1484, August.
    3. Augeraud-Véron, Emmanuelle & Fabbri, Giorgio & Schubert, Katheline, 2021. "Volatility-reducing biodiversity conservation under strategic interactions," Ecological Economics, Elsevier, vol. 190(C).
    4. Antoine Leblois, 2021. "Mitigating the impact of bad rainy seasons in poor agricultural regions to tackle deforestation," Post-Print hal-03111007, HAL.
    5. Edward B. Barbier & Angela Cindy Emefa Mensah & Michelan Wilson, 2023. "Valuing the Environment as Input, Ecosystem Services and Developing Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(3), pages 677-694, March.
    6. Jung, Suhyun & Hajjar, Reem, 2023. "The livelihood impacts of transnational aid for climate change mitigation: Evidence from Ghana," Forest Policy and Economics, Elsevier, vol. 155(C).
    7. Liang, Yuanning & Rudik, Ivan & Zou, Eric Yongchen, 2021. "Economic Production and Biodiversity in the United States," SocArXiv qy76a, Center for Open Science.
    8. Isabelle Chort & Berk Öktem, 2024. "Agricultural shocks, coping policies and deforestation: Evidence from the coffee leaf rust epidemic in Mexico," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(3), pages 1020-1057, May.
    9. Kakpo, Ange & Mills, Bradford F. & Brunelin, Stéphanie, 2022. "Weather shocks and food price seasonality in Sub-Saharan Africa: Evidence from Niger," Food Policy, Elsevier, vol. 112(C).
    10. Razafindratsima, Onja H. & Kamoto, Judith F.M. & Sills, Erin O. & Mutta, Doris N. & Song, Conghe & Kabwe, Gillian & Castle, Sarah E. & Kristjanson, Patricia M. & Ryan, Casey M. & Brockhaus, Maria & Su, 2021. "Reviewing the evidence on the roles of forests and tree-based systems in poverty dynamics," Forest Policy and Economics, Elsevier, vol. 131(C).
    11. He, Xi & Chen, Zhenshan, 2022. "Weather, cropland expansion, and deforestation in Ethiopia," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    12. Costa, Lucas & Sant'Anna, André Albuquerque & Young, Carlos Eduardo Frickmann, 2023. "Barren lives: drought shocks and agricultural vulnerability in the Brazilian Semi-Arid," Environment and Development Economics, Cambridge University Press, vol. 28(6), pages 603-623, December.
    13. Daniel Rondeau & Brianna Perry & Franque Grimard, 2020. "The Consequences of COVID-19 and Other Disasters for Wildlife and Biodiversity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 945-961, August.
    14. Meyer, Jessica, 2023. "How do forests contribute to food security following a weather shock? Evidence from Malawi," World Development, Elsevier, vol. 169(C).
    15. Abman, Ryan & Lundberg, Clark, 2024. "Contracting, market access and deforestation," Journal of Development Economics, Elsevier, vol. 168(C).
    16. Yamamoto, Yuki, 2023. "Living under ecosystem degradation: Evidence from the mangrove–fishery linkage in Indonesia," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    17. Basu, Sayahnika, 2020. "Does Drought Accelerate Structural Change in India?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304324, Agricultural and Applied Economics Association.
    18. Jagger, Pamela & Cheek, Jennifer Zavaleta & Miller, Daniel & Ryan, Casey & Shyamsundar, Priya & Sills, Erin, 2022. "The Role of Forests and Trees in Poverty Dynamics," Forest Policy and Economics, Elsevier, vol. 140(C).
    19. Edward B. Barbier & Jacob P. Hochard, 2019. "Poverty-Environment Traps," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1239-1271, November.

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