Is There a Nexus between Poverty and Environment in Rural India?

This paper presents an empirical analysis of the relationship between rural poverty and environmental change using district-level data from South, Central and West India. Unlike prior works, this study puts the hypothesis of bi-directional link between poverty and environment to econometric test. Environmental change is measured using a satellite-based vegetation index. Consonant with the dominant view in the literature, the evidence suggests that rural poverty spur vegetation degradation. The results also indicate that the vegetation degradation spurs rural poverty but the magnitude of the effect varies across sub regions classified on the basis of geographic and climatic factors. Thus these results provide evidence in support of existence of a poverty-environment nexus in rural India.