Income and the Environment in Rural India: Is There a Poverty Trap?

28 Pages Posted: 15 Apr 2020

See all articles by Haimanti Bhattacharya

Haimanti Bhattacharya

University of Utah

Robert Innes

University of California, Merced

Date Written: January 2013


We study the relationships between rural income distributions and changes in environmental conditions in southern, western and central India between 1994–95 and 2000–01. Other than the relatively rich, we find that all income strata benefit from an improved environment, and intermediate expenditure households benefit more than the very poor in absolute terms. Higher median consumption expenditures and “richness” are estimated to increase environmental decline, but we do not find a significant impact of income poverty on local environmental health. The results do not support the “poverty trap” conjecture, with environmental degradation driving expenditure reductions that promote offsetting aforestation (which benefits the poor).

Keywords: deforestation, environment, income, poverty, satellite data

Suggested Citation

Bhattacharya, Haimanti and Innes, Robert, Income and the Environment in Rural India: Is There a Poverty Trap? (January 2013). American Journal of Agricultural Economics, Vol. 95, Issue 1, pp. 42-69, 2013, Available at SSRN: or

Haimanti Bhattacharya (Contact Author)

University of Utah ( email )

Department of Economics
1645 E Campus Center Drive, #308
Salt Lake City, UT 84112
United States


Robert Innes

University of California, Merced ( email )

P.O. Box 2039
Merced, CA 95344
United States

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