Analyzing the Income Effects of Mining with Instrumental Variables for Poverty Reduction Implications in Caraga Region, Philippines

Balanay, Raquel M and Yorobe, Jose M and Panduyos, Ordem K and Cuenca, Charry C (2014) Analyzing the Income Effects of Mining with Instrumental Variables for Poverty Reduction Implications in Caraga Region, Philippines. Journal of International and Global Economic Studies, 7 (1). pp. 20-31.

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Abstract

The study has analyzed the income effects of mining in Caraga Region with the use of survey data and IV approach, so that inferences for poverty reduction would be drawn for the region. The IV approach used is a two-stage least squares (2SLS) estimation procedure where mining exposure has yielded a positive influence on income. Access to health facilities and potable water sources have proven to be good instruments for mining exposure through probit analysis and over-identification test. Age of the household head, loans, years in school and food and education expenditures are the covariates that have positive influence on income as well, which are associated with lifelong experience/learning and investments for the development of human resources and enterprises in the area. The findings of the study are suggestive of strengthening measures towards human capital buildup to catalyze sustainable development in the mining areas of Caraga Region. These measures when built around the economics of environmental protection provides a more advantageous optimization strategy for the mining benefits in Caraga Region, which may help institute responsible mining or “mining with a conscience.” The use of IV in this study is justified by the significance of endogeneity problem in the empirical analysis. Keywords: income effects, IV, probit, endogeneity, 2SLS, responsible mining

Item Type: Article
Uncontrolled Keywords: income effects, IV, probit, endogeneity, 2SLS, responsible mining
Depositing User: eLib Admin
Date Deposited: 26 Jun 2017 00:53
Last Modified: 26 Jun 2017 00:53
URI: http://lib.mainit.org/id/eprint/86

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