Forest Policy and Economics 9 (2007) 916 – 927

www.elsevier.com/locate/forpol

Economic dependence on forest resources: A case from

Dendi District, Ethiopia
Getachew Mamo a,1 , Espen Sjaastad b,⁎, Pål Vedeld b,2
a
SOS Sahel Ethiopia, P. O. Box 3262, Addis Ababa, Ethiopia
b
Norwegian University of Life Sciences, Department of International Environment and
Development Studies (Noragric), P. O. Box 5003, N-1432 Ås, Norway
Received 13 September 2005; received in revised form 27 July 2006; accepted 4 August 2006

Abstract

This paper examines variation in dependence on forest resources among rural households in Chilimo, Ethiopia, and the income-
equalizing effects of such resources. Data were collected through a systematic questionnaire survey of 102 households, randomly
selected from two peasant associations in the area. Forest income contributed 39% of the average household income, roughly equal
to agriculture, which contributed 40%. Forest income was more important than all other income sources combined for the poorest
40% of households and contributed more to household income than agriculture for 65% of households. While forest income
represents 59% of the total household income for the poorest quintile, the contribution drops to 34% for the wealthiest quintile. On
the other hand, the rich households derive a larger absolute income from forest resources than the poor households. Forest
resources have an important income-equalizing potential among the rural households. Reduced access to forest resources would
greatly affect the welfare of the rural population and increase wealth differentiation among rural households in the study area.
© 2006 Elsevier B.V. All rights reserved.

Keywords: Forest income; Economic dependence; Income distribution; Rural livelihoods; Ethiopia

1. Introduction on environmental resources. In recent years, there

There is a shared understanding among researchers,
policy makers and development practitioners that many
rural households in developing countries are dependent
⁎ Corresponding author. Tel.: +47 64 96 55 11; fax: +47 64 96 52 01.
E-mail addresses: gmheth@yahoo.com (G. Mamo),
espen.sjaastad@umb.no (E. Sjaastad), pal.vedeld@umb.no
(P. Vedeld).
1
Tel.: +251 11 4160391; fax: +251 11 4160288.
2
Tel.: +47 64 96 53 07; fax: +47 64 96 52 01.
1389-9341/$ - see front matter © 2006 Elsevier B.V. All rights reserved.
doi:10.1016/j.forpol.2006.08.001
has been increasing interest in the contribution that
natural forests make to local rural employment and
income (Arnold and Townson, 1998). With a few
notable exceptions, however, there has been little em-
pirical research on the level of dependence across dif-
ferent socio-economic groups.
Cavendish (2000) has noted that the contribution of
forest resources to the welfare of rural households is
regularly overlooked in poverty surveys. Empirical
investigation of dependency on forest resources may
help to improve macro-level poverty estimates and
 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927
improve policy planning and execution. The quantifi-
cation of environmental income may serve as an input
into conservation policy, and particularly establish-
ment of protected areas, by determining the potential
loss to rural dwellers of reduced access to environ-
mental resources.
Arguments and counter-arguments over the link
between poverty and environment proliferate. These
links are, however, commonly discussed at macro and
intermediate levels. Here, the focus is on intra-com-
munity variation in villages that are uniformly poor in
a macro context. A key issue here is thus to investigate
both forest use and dependence on forest resources
among different groups at a local level and its im-
plications for policy.
Several factors may influence household utilization
of freely available forest resources. Some of these
concern household characteristics while others are
contextual. Larger households clear more forest both
because they have more workers and more mouths to
feed (Dove, 1995; Almeida, 1992; Godoy et al., 1997).
Educated individuals may be in a better position to tap
into income flows from natural stocks. Godoy and
Contreras (2001), however, found that a higher level of
formal schooling is associated with less forest cutting.
Adhikari et al. (2004) argued that a higher level of
education makes fuelwood collection increasingly
unprofitable due to higher opportunity costs of labour.
The age of the head of household may be positively
related to forest resource utilization until a peak of
physical strength is reached and children move away
(Piland, 1991, cited in Godoy et al., 1997). On the
other hand, older people may possess superior knowl-
edge about various forest resources, and may utilize
more medicine plants and wild foods.
Total household income (and wealth) is often found
to have a nonlinear relationship with forest resource
extraction. On the one hand, improved off-farm
employment opportunities (Angelsen and Kaimowitz,
1999) and access to credit (Godoy et al., 1997) may
reduce forest clearance as a gap-filling activity. On the
other hand, better asset endowments allow households
to exploit more forest resources. While Escobal and
Aldana (2003) found that the demand for forest
resources increased with income level, Godoy et al.
(1997) found that the relationship between total
income and forest clearance resembled an inverted
U-shape. Angelsen and Kaimowitz (1999) argue that
917
higher incomes, within relevant ranges of income in
developing countries, are likely to increase the
pressure on forests. This argument seems to suggest
that the relationship will remain linear and positive in
poor communities.
Apart from household internal factors, other con-
ditions influence household decisions in important
ways. Greater access to forests and markets may often
accelerate forest extraction (Angelsen and Kaimowitz,
1999). The World Bank (1992), however, suggested
that markets enhance conservation when there are se-
cure property rights. A study from an Amerindian
community in Honduras (Godoy et al., 1997) reported
both positive and negative impacts of markets for wage
labour and annual crops. When market integration
takes place through wage labour employment, it posi-
tively influences forest resource stocks by diverting
people from extractive activities. High prices for agri-
cultural crops, meanwhile, give incentives to clear
more land. Concerning distance from forest, it is ap-
parent that proximity to the forest allows the household
to extract more environmental resources by reducing
labour and transportation costs. Remoteness impedes
extraction not only through increased extraction costs
but also through lower probability of entitlement to the
resource. In the context of distribution and depen-
dence, it is also important that such factors frame
profitability aspects differently for different groups of
households.
The proxy that we use for dependence on natural
forest resources is simply the share of absolute house-
hold income, or the “relative income”, that is derived
from such resources. This is in line with common
practice in the field (Vedeld et al., 2004). According to
Wunder (2001) being resource-poor indicates asset and
welfare poverty.3 Rural households in a state of welfare
poverty can adopt available coping strategies, includ-
ing forest extraction activities. Empirical evidence
from several sources (Reddy and Chakravarty, 1999;
Cavendish, 2000; Escobal and Aldana, 2003) indicates
that poor households derived a relatively large share of
their income from forests and wild lands compared to
better-off households within the same community. The
study in Nicaragua by Godoy et al. (1995) also
3
The concept of “asset poverty” relates to restrictions in choice of
economic activities while “welfare poverty” is an absolute
restriction in household consumption.
918 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927
concluded that as income rises, the importance of non-
timber forest products in the household economy
shrinks. The explanation was that the economic
importance of other income sources such as agriculture,
wage employment and self-employment would rise
relative to the income from environmental resources.
Swinton and Quiroz (2003) suggested that the
probability of engaging in tree extraction was reduced
when people have better access to farmland and credit.
As the value of labour rises with increasing wealth,
the opportunity cost of continuing to spend time ga-
thering food, rather than purchasing it, becomes in-
creasingly unattractive (Byron and Arnold, 1999). The
argument is that many forest-based activities are
arduous and generate low returns that can be easily
dropped as alternatives become available or household
labour becomes scarce. Similarly, it appears that well-
educated households depend less on forest resources of
low economic return. It was reported by Godoy et al.
(1996) that households with more education seem to
reap higher crop yields, earn higher income, have
fewer children, and suffer from fewer idiosyncratic
shocks than households with less education. Education
could also create opportunities for off-farm employ-
ment, self-employment and facilitate out-migration for
better jobs that reduce dependence on forest resources.
Adhikari et al. (2004) found that larger families have
a greater demand for natural resources and more labour
to fulfil this demand. However, it appears that house-
hold composition, gender and age structure are more
important than the mere numbers. Adult labour avail-
ability perhaps places the household in a better position
to liquidate communally owned natural stock than
labour-poor households. Alternatively, ample adult
labour could motivate the household to invest more in
agriculture or rural employment that can fetch higher
incomes than gathering activities. In male-dominated
rural settings, forest-based low-return cash activities
are often taken up by female-headed households who
cannot make a significant living from agriculture due to
absence of male labour for plowing. Aging may affect
dependence on environmental resources negatively
since people lose strength to engage in labour-
demanding jobs. In contrast, Cavendish (2000) argued
that older people have difficulty carrying out arduous
agricultural tasks and may turn to experience-based
resource collection activities that demand less physical
labour and that are free of entry barriers.
In terms of wealth distribution and forest use,
the distinction between absolute and relative forest
income – and how these vary across groups – is of
crucial importance. Generating a large proportion of
absolute household income from forest resources does
not necessarily mean that overall extraction is high.
Indeed, based on empirical evidence from Zimbabwe,
Cavendish (2000) concluded that richer households
use greater quantities of environmental resources in
absolute terms while the poorer households are more
dependent on the resource. Similarly, a recent study
from Peru by Escobal and Aldana (2003) found
that demand for natural resources grows with absolute
income but that the poor depend more on natural
resources than the wealthy. In a study covering the
African continents, Arnold and Townson (1998) re-
ported that where people have had relatively unre-
stricted access to forests, the poor usually derive a
greater share of their overall needs from forest pro-
ducts and activities than the more wealthy, but the
wealthy are often the heaviest users. This general
feature was also found in a recent meta-study of more
than 50 cases from Africa, Asia, and Latin America
(Vedeld et al., 2004).
What are the implications of the above findings for the
role of forest resources in equalizing income? Cavendish
(2000) reported a 30% reduction in income inequality
due to inclusion of forest resources in household surveys
in Zimbabwe. Empirical evidence from Uganda (Aryal,
2002) and Malawi (Botha, 2003) similarly revealed that
forest income significantly contributed to reduced in-
come inequality among rural households. In the World
Bank meta-study (Vedeld et al., 2004), the average
increase in the Gini-coefficient when forest income was
excluded was 0.13 (from 0.36 to 0.49).
What picture emerges from these studies? First,
while poor households in general exhibit greater
dependence on natural forest resources than wealthy
ones, the latter derive greater absolute values from the
resources and thus bear a greater responsibility for any
degradation that occurs. Second, failure to include
forest resources in poverty surveys will exaggerate
income inequalities. Third, and by implication, re-
duced access to forest resources will have an adverse
affect on income equality.
Based on primary data from Dendi District in
Ethiopia, this paper explores the role of forest resource
use in local livelihoods. It examines variation in the
 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927
level of dependence on forest resources across income
groups and the potential equalizing effect of forest
resources. The study area and the methodology used
are covered in Section 2. Results are presented in
Section 3, these are then discussed in Section 4, and
Section 5 concludes the paper.
2. Study area and methodology
2.1. The study area
The study was conducted in two Peasant Associa-
tions (PAs) living adjacent to Chilimo National Forest
Priority Area in Dendi district, Ethiopia. Chilimo
forest, located about 90 km from Addis Ababa to the
west along Jimma road, is among Ethiopia's few
remaining montane forests. The mean annual rainfall is
1225 mm/year and the altitude ranges from 1700 to
3200 m above sea level. The forest has gone through
different management and ownership regimes and was
designated as a national forest priority area in 1982 as
part of the government's increased forest conservation
efforts. According to Farm Africa (1999), cited in
Melaku (2003), 90% of the Chilimo forest is disturbed,
with 35% heavily disturbed, and total forest cover was
reduced by 50% between 1991 and 2001. The Ministry
of Agriculture was given a mandate to conserve the
remaining forest, which is currently in the process of
transferring management and use rights to the sur-
rounding community. Farm Africa, a British NGO,
plays a facilitating role. The main livelihood sources in
the area are agriculture, forest-related activities, and
livestock husbandry. Agricultural extension is provid-
ed both by the local government and by Farm Africa.
2.2. Sampling techniques and data collection
Seven peasant associations live adjacent to the
Chilimo National Forest Priority Area. Limited re-
sources necessitated a two-stage sampling process.
First, Galessa and Gare-arera peasant associations were
identified as broadly representative in terms of distance
to market and proximity to the forest. Galessa is settled
within the range of 11–16 km from Ginchi town,
whereas Gare-area is within the range of 3–7 km
from town. A total of 102 households were randomly
selected from Galessa and Gare-arera using random
number tables. The sampling frame was the list of
919
households gained from peasant association secre-
taries, which indicated a total of 406 households in
Galessa and 477 households in Gare-arera. The random
sample yielded 36 households from Galessa and 66
from Gare-arera.
A questionnaire survey was administered to the 102
households during fieldwork from October to Decem-
ber 2003. For the purpose of this research, a household
was defined as a unit whose members live, cook, and
eat together. Quantitative data was collected on
household income, expenditure, household character-
istics and assets holdings. In addition to conventional
household income, particular attention was given to
different forms of forest income accrued through both
consumption and cash. To qualify as an environmental
utilization, a resource must be freely provided by
natural processes, i.e. it is “natural bounty” (Cavendish,
2000). Secondary data were collected from Farm
Africa and government offices.
Collection of primary data rested mainly on a
detailed seven-page questionnaire, which included sec-
tions on basic household variables, agricultural pro-
duction, livestock, forest extraction, off-farm activities,
and support services. Each of the sections covering
income sources included detailed questions on all
relevant inputs and outputs, allowing us to compute net
incomes (market and home consumption) for not only
the major categories of income but also subcategories
(e.g. the different forest sources, different crops, dif-
ferent animals). Data on incomes, costs, assets and
activities related to the Ethiopian year 1995, which ran
from 11 October 2002 to 11 September 2003 in the
Gregorian calender; maximum recall time for respon-
dents was thus roughly 14 months.
The reliability of the data is subject to the usual
caveats that apply when information is based on
recollection. Unless there is systematic under- or over-
reporting, however, imprecise responses will enter as
white noise. There was no conceivable incentive to
over-report. Given the limited-use nature of the forest,
however, there could be a slight danger of under-
reporting. We believe that this danger was minimized
by the familiarity of the interviewer and first author
with the area. The high percentage contribution of
forest resources to local livelihoods found would seem
to support this. Strictly speaking, given the nature of
the two-stage sampling method, the data are represen-
tative only for the two peasant associations sampled.
920 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927
2.3. Environmental income valuation
The value of a forest can be divided into use and
non-use values (Emerton, 2001; Campbell and Luck-
ert, 2002). The use value is further divided into direct
and indirect values. Non-use values, such as e.g.
existence value, are of importance to resource valuation
exercises but of limited importance to local household
surveys of environmental income (Vedeld et al., 2004)
where the focus is on local and private benefits. Indirect
use values, including environmental services such as
stabilization of water flows and erosion control, are of
great relevance but beyond the scope of this study.
Valuation and household income accounting meth-
ods used in this study draw on Cavendish (2002) and
Vedeld et al. (2004). In short, all products were valued
according to local market prices except fodder, in
which case price was calculated through value-
equivalent substitutes.4 Both consumption and cash
income were calculated for the different goods and
income sources. Material expenditures were deducted
from gross income, as were fines and damages inflicted
on crops by wildlife. The basic measure of income used
is value added rather than profit or rent; that is, all
inputs except family labour were deducted from gross
income. This is acceptable when wage labour markets
are absent or, as in the study area, relatively uniform
across the sample (Sjaastad et al., 2005). All monetary
units were converted from Ethiopian Birr to PPP-
adjusted United States Dollars (USD) by dividing the
former with the 2000 conversion figure of 2.315.
3. Results
3.1. Basic sample characteristics
The average household size was 6.2 and the average
age of household head was 45 years.5 In terms of
household age composition, 53% of the sample
population were in the 0–14 years bracket, 44% in
the 15–64 years – or working age – bracket, and 3% in
the 65+ years bracket. This gave an average depen-
4
Since local market prices for fodder were unavailable, the value
of fodder was calculated by converting grazing land rental fees into
the yield equivalent.
5
“Household size” denotes the number of individuals in the
household; in the regressions in this section, “adult labour” indicates
household adult equivalent units (see Cavendish, 2002).
dence ratio of 1.42. People within the low and high age
brackets do, however, contribute labour, although not
equal to the full adults equivalent. Family labour is a
basis for both on- and off-farm employment activities.
Labour is often shared reciprocally among neighbors
and relatives to offset labour bottlenecks during peak
seasons in agricultural production. Of the 102 sample
households, 78 were male-headed and the remaining
24 female-headed. Oromo (81%), Amhara (11%) and
Gurage (8%) were the three ethnic groups represented
in the sample. As much as 58% of household heads
were illiterate. None of the household heads had
completed high school studies to qualify for engage-
ment in paid public services or other formal employ-
ment schemes.
Livestock, land, houses, and savings constitute the
main household asset endowment. The target commu-
nity themselves identified number of oxen, land size,
savings and housing as wealth indicators during focus
group discussions. Oxen ownership was emphasized as
the main wealth indicator, since oxen are not only status
indicators but also an important source of draught
power for crop production. Land is held on usufruct
terms with an average holding of 2.1 ha per household.
Size of landholding varied between 0 and 7.5 ha, with
4.9% of surveyed households being landless. Farmers'
perceptions about their own farmland fertility status was
reported as fertile (16.5%), medium (61.9%), and poor
(21.6%). Extension services rendered by the Office of
Agriculture reached 40% of sampled households. Farm
Africa provided small credit services for petty trading
and sheep rearing to 46% of the households.
Ecological, institutional, and policy factors are
shared by people in the study area and are not con-
sidered in this analysis. The household food security
situation, distance to market, and proximity to the
resource were seen as contextual factors identified for
analysis. On average, the settlements were at a distance
of 1.3 h walk and 9.2 km from forest and nearest town
respectively. Both of the sampled peasant associations
had equal access to the all-weather road that crosses
through the forest. Only 17.6% of the sampled house-
holds satisfied their consumption needs through own
farm production. The remaining 82.4% faced seasonal
food shortages for an average of 4.5 months of the year.
Of these, 36% reported firewood sales as a the primary
consumption gap filler, 26% reported rural wage
employment, 15% reported sales of small ruminants,
 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927
3% reported rural self-employment, and 2% reported
remittances.
3.2. Income levels and sources
Agriculture is the main livelihood in the study area,
with crop cultivation and livestock providing 40% of
the average total household income among sampled
households. The farming system of the study area can
be classified as mixed crop and livestock subsistence
farming. Barley, teff, enset, wheat, vegetables, pulses,
and maize are the main crops grown in order of eco-
nomic importance. The “false banana” enset (Ensete
ventricosum) is important as an energy source to
smooth out consumption fluctuations (Ferro-Luzzi
et al., 2001). Teff serves both as a subsistence and cash
crop. The largest share of land is devoted to barley
(33%), followed by teff (27%) and wheat (14%). Sale
and consumption of livestock and livestock products
are also important sources of income.
Income from sale and consumption of forest re-
sources is almost as important as crop cultivation and
livestock combined, constituting 39% of mean annual
income. Rural wage employment (12%), rural self-
employment (5%), goods from forest plantations (3%),
and remittances (1%) are other sources of income
(Fig. 1). Rural wage employment covers an array of
Fig. 1. Contribution to annual total household income by source; means and standard deviations (N = 102). Source of income: 1 = agricultural
income; 2 = forest income; 3 = rural wage employment; 4 = rural self-employment; 5 = planted tree income; 6 = remittances.
921
unskilled on- and off-farm jobs while rural self-em-
ployment encompasses petty trade, local liquor pro-
cessing and sales. The mean per capita income of the
sample was 344 USD, somewhat lower than the
national average of 410 USD.
The area under study is thus found in a fairly high-
potential agricultural area, densely populated, with
reasonable urban market access and situated close to a
rather substantial source of forest resources. People's
livelihoods are firmly connected to agriculture and to
natural resource use; they are generally poor and a
majority report food shortages several months per
year.
3.3. The importance of forest income
The average contribution of forest resources to
household income was 39%. Firewood, fodder,
honey, and construction materials are the major
sources of forest income (Fig. 2). Firewood constitu-
tes the largest proportion of forest income (59%),
utilized for both home consumption and for sale.
Construction materials for houses, storage facilities,
fences, furniture, and farm implements represented
21% of forest income, followed by fodder grazed and
browsed (18%). Honey contributed the remaining 2%
of annual forest income.
922 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927
Fig. 2. Contribution to annual household forest income by source; means and standard deviations (N = 102). Source of forest income:
1 = fuelwood; 2 = construction materials; 3 = fodder; 4 = honey.
The communities depend entirely on local forest re-
sources for domestic energy needs, construction
materials, farm implements and wooden furniture. In
terms of fodder, the cut and carry system is not com-
mon in the study area, except for a very few people
who sell grass grown on plots left for short fallow.
About 85% keep their cattle in the forest from two to
12 months of the year. 42% reported that they are
entirely dependent on the forest for grazing and
browsing. Depending on livestock holding and prox-
imity to the forest, the value derived from fodder
varied between 0 and 603 USD per year.
3.4. Determinants of forest income
From a household economic perspective, there are
several reasons why one would expect that house-
holds with different socio-economic characteristics
adapt differently relative to utilizing forest resources.
These are related to production capabilities, con-
sumption motives, and how households respond to
challenges beyond their immediate control. Table 1
presents the result of an ordinary least squares
regression where forest income was regressed against
household characteristics, per capita income, com-
posite wealth indicators and selected conditioning
factors.
Per capita forest income is positively related to
household size (⁎P b 0.05) and the number of food
deficit months (⁎P b 0.05) and negatively related to
adult labour ( ⁎⁎ P b 0.01), distance to forest
(⁎⁎P b 0.01), and distance to market (⁎⁎P b 0.01).
Neither sex, age (a square term was included), or
education of the household head yielded significant
results. Nor did total per capita income and asset
endowment at the ⁎P b 0.05 level (though weak trends
are observable through coefficients significant at the
10% level).
3.5. Determinants of forest income dependence
We used relative forest income – the share of total
household income contributed by forest extraction – to
measure the degree of dependence on forest income
sources. In order to analyse relationships between
forest income dependence and household level factors,
we ran an ordinary least squares regression of relative
forest income (RFI) against household characteristics,
household income, asset endowment, and various con-
textual variables. The results are presented in Table 2.
Among five explanatory variables in the category of
household characteristics, household size (⁎⁎P b 0.01)
and adult labour (⁎⁎⁎P b 0.001) were found to be
statistically significant. The signs were the same as
 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927 923

Table 1 matching the result arrived at for absolute per-capita

OLS regression of household per capita forest income (in PPP- forest income.
adjusted USD) against socio-economic characteristics
Variable Exp. Coef. SE t- p- 3.6. Forest income, forest income dependence, and
sign value value
wealth distribution
Per capita forest income na 288.510 65.702 4.39 0.000
Household size + 25.171 10.099 2.49 0.015
We regressed per-capita forest income (FI) and
Adult labour + − 40.790 12.959 − 3.15 0.002
Age of household head – − 3.013 2.676 − 1.13 0.263 relative forest income (RFI) against per capita total
Age of household ? 0.038 0.028 1.41 0.163 income (PCI). While per capita forest income is
head square positively and significantly related to total per capita
Sex of household head + − 13.616 14.035 − 0.97 0.335 income (R2 = 16.8, ⁎⁎P b 0.01), relative forest income
Education of household – 2.065 5.827 0.35 0.724
is inversely and significantly correlated with per capita
head
Per capita income + 0.025 0.013 1.96 0.053 household income (R2 = 76.4, ⁎⁎P b 0.01). The strong,
Total asset endowment + 0.004 0.003 1.74 0.086 inverse relationship indicates that while comparatively
Forest distance in – − 40.873 12.238 − 3.34 0.001 wealthy households extract greater values they rely
walking hours less on forest resources.
Market distance in km – − 4.473 1.509 − 3.03 0.003
Number of food deficit + 4.365 1.911 2.28 0.025
months in the family Table 2
N =102; S =116.9; R-Sq=0.550; R-Sq(adj) =0.495; F =9.99; P =0.000. OLS regression of household relative forest income against socio-
economic characteristics
Variable Exp. Coef. SE t- p-
those for forest income and the implications are similar. sign value value
Large families are constrained by income options but
Relative forest na 0.796380 0.09240 8.62 0.000
families with high worker–consumer ratios are, income
independent of family size, better able to utilize such Household size + 0.089550 0.02766 3.24 0.002
options. There is also significant and negative correla- Adult labour – −0.128180 0.03505 − 3.66 0.000
tions between forest income dependence and income Age of household + −0.000289 0.00114 0.88 0.383
from other sources; agriculture (⁎⁎⁎P b 0.001), wage head
Sex of household – −0.040610 0.03758 − 1.08 0.283
employment (⁎⁎⁎P b 0.001), and self-employment head
(⁎P b 0.05). Households with a lack of other options Education of – −0.008600 0.01760 − 0.49 0.626
appear more dependent on forests. Asset endowments household head
were, however, not found to have a significant in- Agricultural – −0.000343 0.00006 − 5.79 0.000
income
fluence on dependence.
Rural wage – −0.000343 0.00007 − 5.09 0.000
Distance to the forest is, as expected, negatively employment
and significantly associated with forest dependence Rural self- – −0.000336 0.00016 − 2.11 0.038
(⁎⁎P b 0.01). In contrast to the negative association employment
between forest income and distance to market, how- Land size – −0.005860 0.01075 − 0.54 0.587
(hectares)
ever, there is no significant relationship between de-
Livestock value – 0.000006 0.00001 0.65 0.520
pendence and market distance. Value of buildings – −0.000001 0.00001 − 0.15 0.883
We observe a significant (⁎⁎P b 0.01) positive rela- Savings – 0.000093 0.00006 1.47 0.145
tionship between dependence on forest resources and Forest distance – −0.103360 0.03509 − 2.95 0.004
number of food deficit months over the year. It is in walking hours
Market distance + −0.004547 0.00459 − 0.99 0.324
expected that food-insecure households not only turn
in km
to the natural environment for help to a greater overall Number of food + 0.016845 0.00504 3.34 0.001
extent than food-secure ones but that their dependence deficit months
on the forest is greater. in the family
Age, sex, or education of household head had no N = 102; S = 0.1365; R-Sq = 0.674; R-Sq(adj) = 0.618; F = 11.87;
significant effect on forest income dependence, P = 0.000.
924 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927

In order to investigate differences in wealth, data on income is more important than all other income
per capita household income were divided into five sources added together for the poorest 40% of the
quintiles where the bottom and top quintiles are re- community and that the contribution of income from
ferred to as the poorest and the wealthiest group re- agriculture (crop and livestock) is less than that made
spectively. Quintile analysis supports the results of the by forest income for about 65% of the community.
regression analysis. The average annual household Firewood, construction materials, fodder and honey
income for the poorest group (160 USD) was only a were the main contributors to household forest in-
quarter of that of the wealthiest group (636 USD). The comes. Firewood is the main source of income for poor
annual forest income for the wealthiest group (191 households; fodder and construction materials are
USD) was roughly twice that of the poorest group (95 important for households in all income groups, but the
USD). Thus, while forest income represents 59% of overall value extraction is particularly high for the
poorest households' income the proportion declines to wealthiest households. In the study area, utilization of
30% for the wealthiest households. construction material comprises house building, fenc-
We employed ratios to compare absolute value ex- ing, granary construction, and production of furniture
traction and dependence between the poorest and and farm implements.
wealthiest groups, both in terms of overall forest Grass and shrubs are important inputs in livestock
extraction and in terms of the most important use cate- production. Exploitation of fodder resources from
gories (fuelwood, construction materials, fodder, and communal lands is obviously dependent on livestock
honey). The ratios are given in Table 3. The relative endowment. In the study area, the cut and carry system
ratio describes dependence (RFI) by the wealthiest is not developed, and the wealthy benefit more from
quintile divided by that of the poorest quintile; the fodder resources. Apiculture enterprise does not con-
absolute ratio describes absolute value of extraction by tribute much income to the household economy.
the wealthiest quintile divided by that of the poorest To further explore the distributional effects of forest
quintile. income, a Gini coefficient, indicating the level of
Examination of forest income by sources confirmed inequality (see Section 2), was computed for total per
that the wealthiest quintile utilized a higher quantity of capita income. Forest income was then deducted from
all forest resources; the absolute ratios for construction total income and a new Gini coefficient was computed.
materials (4.19), Fodder (3.48), and firewood (1.35) The resulting Gini coefficients were then compared
were all greater than unity (the ratio for honey was also to determine if forest incomes contribute to income
above 1, but the figures here were insignificant). equalization among rural households.
Conversely, dependence was found to be higher for Income inequality, as measured by the Gini
the poorest group, as indicated by a relative ratio coefficient, is 0.28 when forest incomes are included.
smaller than unity, for all forest resources except con- In general, the income inequality among households in
struction materials. Further analysis reveals that forest the study area is not pronounced compared to the
national Ethiopian Gini coefficient index (0.40) and to
Table 3 that of other developing countries like Uganda 0.55
Relative and absolute use ratios (wealthy/poor) for different forest (Aryal, 2002) and Malawi 0.41 (Botha, 2003).
goods When forest incomes are excluded, however, the
Per capita RFI FI Ratio coefficient rises to 0.41.
income by
Poor Wealthy Poor Wealthy Relative Absolute
source
4. Discussion
Fire wood 0.44 0.18 70 94 0.41 1.35
Construction 0.07 0.08 12 49 1.19 4.19
Results based on questionnaire surveys – and thus
materials
Fodder 0.08 0.07 13 47 0.89 3.48 on the recall, accuracy, and intentions of respondents –
Honey 0.00 0.00 0 2 na na are subject to various biases. Recall periods in the
All sources 0.59 0.33 95 191 0.58 2.01 survey on which this paper is based were, however,
RFI = relative forest income; FI = absolute forest income (in PPP- quite normal (maximum 14 months) and problems of
adjusted USD). recall will under some circumstances show up as white
 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927
noise. While the familiarity of one of the authors with
the survey area may have reduced strategic answers
(particularly with respect to illegal harvesting), how-
ever, such bias cannot be entirely eliminated. Figures
on forest incomes and dependence should thus be
treated as conservative estimates.
The results of this study with regard to forest use
and dependence support findings from many other
studies. In particular, the study supports the notion that
many rural populations are highly dependent upon
forest resources for their livelihoods; in the study area,
forest resources contributed on average 39% of all
household income. Both overall extraction of and de-
pendence upon forest resources were found to increase
with household size, indicating that larger households
face increasing constraints in terms of alternative in-
come sources. Greater availability of adult labour was
found to reduce both extraction and dependence, in-
dicating on the one hand that children and youth may
play a significant part in forest resource extraction but
also that households with higher worker–consumer
ratios are better able to circumvent constraints in terms
of livelihood diversification.
In terms of determinants of forest income, the
positive relation between per capita forest income and
household size is of interest, particularly when juxta-
posed with the result that such income is negatively
related to availability of adult labour. Larger families
may naturally need to clear more forest because they
have more mouths to feed; the increase in per capita
forest utilization as household size increases, however,
would seem to indicate that larger families may find it
difficult to access alternative sources of subsistence, a
constraint that clearly overwhelms any economies of
scale in consumption. On the other hand, greater avail-
ability of adult labour may cause the household to
diversify their economic portfolios to rural wage
employment, self-employment and other activities that
drain labour from extractive activities. The results may
indicate, first, that children and youth are engaged in
extractive forest activities and, second, that households
with high worker–consumer ratios are less affected by
constraints in availability of alternative income sources.
Increasing distance to the forest edge and to the
nearest town market reduced overall extraction of
forest resources. While dependence also decreased
with increasing distance to forest edge, however, there
was no significant relationship between dependence
925
and distance to market. This reflects the broad and
essential role of such markets also in rural areas;
market-remote households not only have to struggle
with reduced opportunities for sales of forest products
but also fewer alternative income-generating options
in terms of agricultural marketing, self-employment,
and wage labour. They are, in general, poorer.
Asset endowments are often important for utiliza-
tion of forest resources, particularly with regard to
livestock and fodder extraction. In this study, however,
only a weak trend was observed between asset endow-
ment and forest resource extraction. Opposing forces
may be an explanation for this: while wealthy house-
holds often are characterized by superior opportunities
to exploit alternative income sources, and thus will be
less dependent on forest resources, they will also often
have large herds of livestock dependent on forest
fodder resources.
Seasonal food deficits are positively and signifi-
cantly correlated with forest incomes. This is not sur-
prising since natural resources represent an important
fallback option for resource-poor rural households,
particularly where there are few alternative employ-
ment opportunities. As mentioned earlier, 36% of the
survey area households depend on firewood sales
during seasonal food shortage periods.
In terms of the links between forest resource use,
dependence, and wealth distribution, this study sup-
ports conclusions reached elsewhere: while the com-
paratively wealthy extract greater overall values from
the forest the poor remain more dependent on these
resources. In Dendi District, the wealthiest quintile
extracts roughly twice as much value as the poorest
quintile; but the poorest remain roughly twice as de-
pendent as the wealthy (measured in terms of relative
contribution). This broad picture can be disaggregated
into different categories of forest goods. Thus, while
the poor disproportionately cut trees for firewood, the
wealthy rely to a greater extent on construction
materials, a higher-value output.
In general, this study confirms the important role of
forests in securing livelihoods among the poorest rural
dwellers. When forest incomes are removed, the Gini
coefficient rises from 0.28 to 0.41, a substantial change
in the context of a uniformly poor rural area. This is
identical to the increase of 0.13 found in Malawi
(Botha, 2003), higher than the increase of 0.06 found in
Uganda (Aryal, 2002), and comparable to the increase
926 G. Mamo et al. / Forest Policy and Economics 9 (2007) 916–927
of 0.10 found by Vedeld et al. (2004) for a collection of
studies from different developing countries. A study
from rural Zimbabwe (Cavendish, 1999) reported a
30% reduction of measured inequality among rural
households due to inclusion of forest income. Although
there is variation from case to case, the general trend
indicates that forest resources have considerable
potential for reducing wealth differentiation among
rural households, and our study supports this.
Note, however, that the true equalizing effect of
forest resources will depend on the optional activities
faced by households; how they would have acted in the
absence of forests and the income thus derived. In a
realistic scenario where the income-earning potential
of optional activities increases with wealth, the Gini
coefficient differential may either underestimate or
overestimate the true effect. It will be correct only
when potential income from optional activities tends to
be proportional to existing non-forest income. In short,
the Gini coefficient differential will produce fairly
good results whenever the general scenario of better
options for the wealthy holds. When this scenario does
not hold, however, the method is dubious.
Among rural populations in poor countries, forest
resources can serve several purposes (see Section 2).
The picture that emerges from the study area is one
where the forest is not merely a safety net, to be utilized
in times of predictable or unpredictable downturns in
other income-earning opportunities, but an essential,
perennial livelihood source for poor and “wealthy”
households alike. The distinction between poor and
wealthy mainly relates to the type of goods extracted
(determined in part by asset endowment) and the ability
to access additional income sources. But the forest is
universally important; even for the wealthiest quintile,
relative forest income reaches 30%, well above the
average (22%) found for all groups across more than 50
cases worldwide in a study by Vedeld et al. (2004).
5. Conclusion
In light of the above discussion, an important point
obtains with regard to poverty surveys, which often
overlook income from wild resources such as natural
forests, particularly subsistence income. One effect of
this is the overestimation of rural poverty in absolute
terms; more problematically, policies based on such
incomplete surveys may culminate in policies of
crucial importance to natural resources and rural
livelihoods that are based on complete ignorance of
the link between the two.
The political economy of forest use and livelihoods
in rural areas of poor countries is faced with two
fundamental dilemmas. First, use of and dependence
on forest resources are often high in terms of physical
extraction rates and relative economic contribution,
particularly among “the poorest of the poor”. Such use
and dependence may lead to overexploitation in the
sense of reducing long-term supplies of direct-use
values as well as environmental services such as water
flow stabilization, erosion control, carbon sequestra-
tion, and biodiversity. To pursue conservation agendas
by restricting access to forest resources may, however,
relegate rural people to levels of livelihood deprivation
that entail health problems, loss of life, distress mi-
gration, social disaffection and conflict. Second, the
solution of increasing agricultural productivity or pro-
fitability, no simple task in itself, may – in closed
economy settings – relieve pressure on forest re-
sources, but will more often lead to in-migration and
increased forest clearing (Angelsen, 1999).
Neither solution – reduced forest access, increased
agricultural productivity or profitability – is realistic in
the context of Dendi District, Ethiopia, and areas with
comparable natural and social environments. Greater
local participation in decision making, promotion of
improved forest management practices, and enhanced
marketing infrastructure may contribute positively but
will ultimately have limited effect. Instead, expanding
the range and profitability of livelihood options other
than forest extraction and agriculture appear as the only
viable alternatives. This implies a policy shift away
from the resource itself to the broader local economy
and alternative rural livelihoods. Recent studies from
Africa and other continents have tended to emphasize
the diversity of rural livelihoods and the exaggerated
importance often accorded land and natural resources
in the past. The case from Dendi reminds us that in
some areas, land and natural resources remain abso-
lutely critical, to the possible detriment of both the local
population and the resource on which it depends.
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