Impact of tree planting on household well-being: evidence from the central highlands of Vietnam

Household land use decisions in the tropics have a wide range of outcomes and impacts on economic development, environmental conservation, and social development. This study seeks to contribute to this debate by examining the effects of tree planting on poverty alleviation and welfare improvement in Vietnam. We employ a combination of multinomial endogenous treatment effect and propensity score matching, using survey data collected from 239 households in 11 communes in Vietnam's Central Highlands region. We find that households engaged in tree planting can increase their income and alleviate poverty compared to non-engaging households. Specifically, long-term cashew plantations provide early harvests and have proven to be a preferred crop for households dealing with immediate livelihood needs. However, short-term acacia timber crops contribute insignificantly to poverty reduction and may be more suitable for households with greater financial resources. The policy implication underscores the importance of interventions tailored to support impoverished households with urgent livelihood needs. Prioritizing immediate necessities is crucial before households can invest in long-term tree planting.