Events at CERGE-EI
Thursday, 18 May, 2017 | 16:30 | Applied Micro Research Seminar
Rhita Simorangkir (Job Talk) “Environmental Consequences of Poverty Alleviation Programs: Evidence from a Conditional Cash Transfer Program in Indonesia”
Georgia State University, Atlanta, GA, USA
Authors: Paul Ferraro and Rhita Simorangkir
Abstract: Although an increasing number of studies measure the effects of environmental programs on poverty, little empirical evidence exists about the effects of poverty programs on the environment. Indonesia, which is home to one of the world’s most biologically diverse rainforests, started phasing in a poverty alleviation program in 2007. The program, called the Program Keluarga Harapan (PKH), assigns conditional cash transfers to eligible poor households. We seek to estimate the effect of these substantial and persistent income transfers on deforestation. To do so, this study combines administrative data from the PKH and the Indonesian government, remote sensing data from satellites, a deep understanding of how the PKH was scaled up across villages and over time, and econometric methods to control for confounding variables that are correlated with both deforestation and exposure to the PKH. The econometric methods combine semi- parametric matching methods, which control for observable pre-treatment confounding characteristics, with a difference-in-differences (DID) design that uses a fixed-effect, panel data regression estimator to control for unobservable, but time-invariant confounders. Exposure to the PKH decreases annual forest cover loss in a village by an estimated 16.9%, on average. Thus, in Indonesia, efforts to reduce poverty can also yield environmental co-benefits.
