Poverty and Inequality in the Rural Brazilian Amazon: A Multidimensional Approach

This paper analyses poverty and inequality dynamics among smallholders along the Transamazon Highway. We measure changes in poverty and inequality for original settlers and new owners, contrasting income-based with multidimensional indices of well-being. Our results show an overall reduction in both poverty and inequality among smallholders, although poverty decline was more pronounced among new owners, while inequality reduction was larger among original settlers. This trend suggests that families have an initial improvement in livelihood and well-being which tends to reach a limit later—a sign of structural limitations common to rural areas and maybe a replication of boom and bust trends in local economies among Amazonian municipalities. In addition, our multidimensional estimates of well-being reveal that some economically viable land use strategies of smallholders (e.g., pasture) may have important ecological implications for the regional landscape. These findings highlight the public policy challenges for fostering sustainable development among rural populations.