Farming efficiency and environmental resource dependence: Evidence from panel data for rural Central Vietnam

authored by: Sina Bierkamp, Trung Thanh Nguyen, Ulrike Grote
Abstract: Farming and natural resource extraction are the main livelihood strategies of the rural poor in developing countries. A better understanding of their relationship is needed to alleviate existing pressures on resources and to reduce poverty. To date, mainly monetary indicators have been used to measure environmental resource dependence. However, these are inadequate for poor people who consume rather than sell their environmental products. Therefore, we propose the Environmental Resource Dependence Index (ERDI) to better capture the multidimensionality of dependence. We analyse the relationship between farming efficiency and environmental resource dependence using a simultaneous equations model (SEM) and panel data for 2013, 2016 and 2017 from three rural provinces in Central Vietnam. Time-variant farming efficiency is estimated using a stochastic frontier model (SFM) with true random effects and Mundlak's adjustment. Our results show that monetary measures underestimate the extent of dependency. Therefore, policymakers should be careful to correctly identify those who are dependent on the environment. In addition, the results suggest that improved farming efficiency reduces the dependence on environmental resources. At the same time, higher dependence does not have a significant effect on farming efficiency.
Organisation(s): Institute of Environmental Economics and World Trade
Type: Article
Journal: Australian Journal of Agricultural and Resource Economics
Volume: 68
Pages: 146-167
No. of pages: 22
ISSN: 1364-985X
Publication date: 02.01.2024
Publication status: Published
Peer reviewed: Yes
ASJC Scopus subject areas: Agricultural and Biological Sciences (miscellaneous), Economics and Econometrics
Electronic version(s): https://doi.org/10.1111/1467-8489.12543 (Access: Open)

BibTeX

@article{c964694d8e734c97bba56d67b00fe56b,
title = "Farming efficiency and environmental resource dependence: Evidence from panel data for rural Central Vietnam",
abstract = "Farming and natural resource extraction are the main livelihood strategies of the rural poor in developing countries. A better understanding of their relationship is needed to alleviate existing pressures on resources and to reduce poverty. To date, mainly monetary indicators have been used to measure environmental resource dependence. However, these are inadequate for poor people who consume rather than sell their environmental products. Therefore, we propose the Environmental Resource Dependence Index (ERDI) to better capture the multidimensionality of dependence. We analyse the relationship between farming efficiency and environmental resource dependence using a simultaneous equations model (SEM) and panel data for 2013, 2016 and 2017 from three rural provinces in Central Vietnam. Time-variant farming efficiency is estimated using a stochastic frontier model (SFM) with true random effects and Mundlak's adjustment. Our results show that monetary measures underestimate the extent of dependency. Therefore, policymakers should be careful to correctly identify those who are dependent on the environment. In addition, the results suggest that improved farming efficiency reduces the dependence on environmental resources. At the same time, higher dependence does not have a significant effect on farming efficiency.",
keywords = "environmental resource dependence, farming efficiency, simultaneous equations model, stochastic frontier model, Vietnam",
author = "Sina Bierkamp and Nguyen, {Trung Thanh} and Ulrike Grote",
note = "Funding Information: We thank the farmers in Ha Tinh, Thua Thien Hue and Dak Lak for their support and cooperation. We further acknowledge the financial support of the German Research Foundation (DFG). In addition, we appreciate the valuable feedback from the participants at the International TVSEP Conference in G{\"o}ttingen 2022, at the German Development Economics Conference in Hohenheim 2022, and from two anonymous reviewers. Open Access funding enabled and organized by Projekt DEAL. ",
year = "2024",
month = jan,
day = "2",
doi = "10.1111/1467-8489.12543",
language = "English",
volume = "68",
pages = "146--167",
journal = "Australian Journal of Agricultural and Resource Economics",
issn = "1364-985X",
publisher = "Wiley-Blackwell Publishing Ltd",
number = "1",
}