Natural Resource Management and Household Well-being: The Case of POSAF-II in Nicaragua

Abstract

Summary Measuring the impact of natural resource programs is a key element in the formulation and implementation of policies designed to promote farm income while enhancing the quality of the surrounding environment. In this paper, we analyze the economic impact of natural resource technologies delivered by the Socio-environmental and Forestry Development Program-II (POSAF-II) in Nicaragua. We use cross-sectional data for 1,483 households, from 212 treated and control communities. Results obtained from propensity score matching (PSM), ordinary least squares (OLS), weighted least squares regression (WLS) based on PSM, and instrumental variables (IV) regression indicate that POSAF-II has had a positive impact on the total value of agricultural production of beneficiary farmers. An internal rate of return analysis supports the hypothesis that increasing household income while encouraging the sustainable use of natural resources through the implementation of suitable management programs can be complementary development objectives.