Market Access, Poverty, and Resources in South Africa: Understanding the Multi-Dimensionality of Market Access and its Influence on Resource Use Decisions

Abstract:     
Rural households are the primary agents of environmental change in the very area where parks and protected areas are attempting to conserve ecosystem diversity. It is crucial to understand the linkage between market access and household resource use decisions if integrated conservation and development projects are to be successful in the long-term. Improving market access has been found to increase household welfare, which likely means an increase in consumption and natural resource use. The first goal of this project is to move beyond the notion of market access as a spatial concept toward one that recognizes household capacity to utilize and access the resources that markets provide (i.e., jobs, financial instruments, and insurance). The second goal is to see how each factor of market access influences resource use decisions.

Data was collected from six communities bordering Kruger National Park in South Africa. The multi-dimensionality of market access was investigated using factor analysis, with findings demonstrating that market access is a function of place, social connections, capacity and financial knowledge. For household decisions on the allocation of consumption towards local natural resources, econometric models suggested that improving household status regarding each of the four dimensions of market access results in the household substituting away from local natural resource goods. In modelling cattle ownership decisions, improvement in capacity results in a reduction in cattle ownership, suggesting the market goods that are substitutes for cattle are only accessible via an increase in education and/or exposure to the cash economy.

Number of Pages in PDF File: 22

Keywords: South Africa, market access, poverty, natural resources, Kruger National Park, factor analysis, quasi-likelihood method

JEL Classification: D13, D19,O12, O13, Q19, Q20

working papers series