The paper empirically examines the contribution of forest-environmental income, and its role in well-being outcomes among the forest dependent households in rural Nepal. The results are based on a one-year survey of 303 households that included the detailed information on household demographics, income and assets and the people's perception in the change in their well-being compared to the last five year. To capture likely non-linear dynamics of well-being status, a probit regression model is tested. Overall, forest environmental income contributed an average of 16% of the total household income. Relative environmental reliance decreased with rising income while absolute environmental income increased. The perception of well-being was related to shock exposure and households' endowments to cope with shocks. In particular, households exposed to several consecutive shocks (two or more severe shocks) over the course of five years significantly reported to be worse-off. The limited role of forest in improving the well-beings of the households is associated with their limited access to the resources. Identification of income groups, their expected wealth status, and asset and access constraints that limit economic advance are used to suggest appropriate targets of intervention.
2014 FORMATH Research Group