Livelihood commercialisation and resource use across the border: Explaining environmental income differences in northern Laos and Vietnam

Forests and environmental areas remain important sources of rural livelihoods in many parts of the world. As economies industrialise and forest is lost, households typically transition towards increasingly commercial livelihoods. Consequently, the relative importance of forests and environmental products tends to decrease. This paper compares rural and environmental incomes on both sides of the national border in northern Laos and Vietnam to better understand changes in environmental resource use as livelihoods commercialise. Based on household survey data ( n = 320), I analyse income inequalities and environmental resource uses and quantify the determinants of rural and environmental incomes using linear regression analysis. The study finds that total household incomes are comparable between countries. Although income compositions and asset endowments diverge strongly, land size, value of assets, livestock units, and access to wage and business income positively affect rural household incomes. Environmental income, mainly from subsistence use of non-timber forest products, constitutes an average of 14.9 % of household income in Laos and 1.8 % in Vietnam. Lower-income, asset-poor and subsistence-oriented farmers rely more on environmental income but do not extract higher values from environmental resources. Additionally, ethnic minority households in Vietnam and households residing in the less accessible highland area in Laos have higher relative environmental incomes. The paper provides the first detailed analysis of environmental incomes in Laos and demonstrates the continuing importance of subsistence-based incomes in a mountainous context in Vietnam. Careful attention to regional commodity chains and national environmental policies is needed to appreciate changes in environmental incomes as rural livelihoods commercialise. • Similar factors explaining rural & environmental incomes despite different contexts. • Low-income, asset-poor, subsistence farmers are more reliant on environmental income. • Environmental income has an inequality-dampening effect on total income. • Disaggregating incomes shows enduring importance of subsistence activities. • Nationally specific mechanisms shape income compositions and absolute amounts.