Poverty, Structural Transformation, and Land Use in El Salvador: Learning from Household Panel Data.

The article focuses on the agriculture's expansion at the expense of natural habitats in El Salvador. Researchers use the data to describe how some households have raised living standards, usually by diversifying away from agriculture. In contrast, households that depend primarily on agriculture, either because they farm or because wages on other people's farms comprise a large part of their income, tend to be mired in poverty. Descriptive statistics and econometric analysis are used to identify the household characteristics related to income growth and diversification away from agriculture. As a result of considerable income volatility, households have risen out of poverty in some years and experienced hard times in other years. To understand the linkages among poverty and integration to markets as well as implications for land use, households in the panel are classified each year according to the sector that generates the greatest share of their income. The panel data make it possible to show how linkages between diversification and income growth are associated with shifts of some households across categories over time.