Productivity effects and natural resource management: econometric evidence from POSAF-II in Nicaragua

What is it about?

In this paper, we analyze the impact of natural resource technologies delivered by the Socio-environmental and Forestry Development Program-II (POSAF-II) in Nicaragua. Using cross-sectional data for 1,201 farmers (475 beneficiaries, 726 control farmers), we provide empirical evidence concerning the effects of an NRM program on two critical components of productivity: technological change (TC) and technical efficiency (TE). We use propensity score matching (PSM) to mitigate potential biases from observable variables and a recent stochastic production frontier (SPF) model that addresses sample selection bias arising from unobservable variables. Our results show that POSAF-II has had a positive impact on the two dimensions of productivity analyzed, i.e., TC and TE. This study contributes to the literature on impact evaluation by showing how an intervention designed to improve natural resource management can also enhance the income of poor farm households through increases in productivity.

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Why is it important?

Understanding how natural resource management (NRM) technologies impact agricultural productivity is essential in order to ensure that policies designed to reduce environmental degradation and alleviate poverty are successful.