Forest income and inequality in Kampong Thom province, Cambodia: Gini decomposition analysis

Abstract

This study analyzed the distribution of forest income and other variable sources of rural household income and considered their importance for the reduction of income inequality and poverty. We employed Gini decomposition to measure the contribution of forest income and other sources of income to income equality and assess whether they were inequality-increasing or inequality-decreasing in the 14 villages. The forest income Gini correlation with total income was very high, Rk = 0.6960, and the forest income share of total rural household income was 35% (Sk = 0.3570). If the income earned from forest activities was removed, the Gini index would increase by 10.3%. Thus, if people could not access forest resources because of vast deforestation, perhaps from the limitations of government-managed forestry, unplanned clearing of forest land for agriculture or the granting of ELCs, there would be an increase in income inequality and poverty among rural households. The findings suggest that policy makers should look beyond agriculture for rural development, as forest resources provide meaningful subsistence income and perhaps contribute to both preventing and reducing poverty and inequality in rural communities. The study found that non-farm activities were inequality-increasing sources of income. The share of non-farm income to the total rural household income was Sk = 0.1290 and the Gini index of non-farm income was very high, Gk = 0.8780, compared with forest and farm income. This disagrees with other studies which have reported that non-farm income was inequality-decreasing for the rural poor.