Identifying a Sustained Pathway to Multidimensional Poverty Reduction: Evidence from Two Chinese Provinces

09 Oct 2017

Poor rural households in developing countries often endure many-faceted burdens including monetary poverty, nutrition deficiency and energy shortage due to reliance on limited local natural resources with low utilisation efficiency. We investigate a sustained pathway in rural China to escape the vicious circle between three important dimensions of poverty – deficiency of income, malnutrition and low energy consumption profile in terms of reliance on firewood. By exploiting household panel data, we identify three inter-locking deprivations. Firewood plantations offer short-term solutions to break them through income effects, while the effective long-term means are increasing agricultural labour productivity and provision of agricultural loans. There are no household-level returns to rural electrification or infrastructure.