Identifying a Sustainable Pathway to Household Multi-dimensional Poverty Reduction in Rural China
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Poor rural households in developing countries usually endure many-faceted burdens
including monetary poverty, nutrition deficiency, and energy shortage due to reliance
on limited local natural resources with low utilisation efficiency. This paper
investigates a pathway for rural Chinese households to escape the vicious circle
between multi-dimensional low wellbeing including deficiency of income, nutrition
and energy without relying simply on excessive firewood plantations. We propose a
dynamic and recursive multi-equation mixed model to capture the complex,
endogenous, and causal inter-play between the above three dimensions of poverty and
households’ environment-related livelihood arrangement, namely firewood
plantations. We identify inter-locked traps in multi-dimensional poverty by exploiting
household panel data. Firewood plantations offer a short-term solution. Increasing
labour productivity and providing agricultural loans can break the circle in the longterm.
Institutional instruments in terms of subsidising households to converting the
cultivated land to forest or pasture play a limited role in limiting firewood production.