Forest dependence and income inequality in rural Ethiopia: evidence from Chilimo-Gaji community forest users

Abstract

The aim of the study was to examine the determinants of forest dependence and the role of community forest on income inequality in rural Ethiopia. Regression results, using Heckman’s two-stage estimation method, suggest that the probability of households’ participation in low-return forest activities is determined by farm size, number of male members in the household and distance from the forest plot to the household’s homestead. Further, the likelihood of households’ participation in high-return forest activities is determined by the number of male household members, the distance from the households’ homestead to the community forest block and being a member of the forest user group’s executive committee. Using instrumental variable method, we found that, in relative terms, households with more non-forest income are less likely to depend on forest commons for their livelihood. Further, wealthier households are less dependent on forest products for their livelihood. We also found that forest products play a crucial role in reducing income inequality in the study area. Income inequality increases by 24% when we exclude forest income from the calculation of inequality measure (Gini coefficient).