Finished Studies

Impact Of Mining On Local Households Living Standards: Mongolian Case

Authors: Manlaibaatar Zagdbazar

Source: Economic Research Institute

Language: English

Keywords: economic development, mining, natural resources, regional economic activity, rural analysis

Date: 2018-06-13

The purpose of this study is to see if this improvement in rural households’ living standards is related to mining activities. In this study, data from following three different sources were combined: The Extractive Industries Transparency Initiative of Mongolia’s open database on taxes and licensing of all mining companies from 2009 to 2015 at the district level; the National Statistics Office’s Household Socio-Economic Survey data from 2010 to 2016; and the National Statistics Office’s open database of socio-economic data at the district level from 2010 to 2016. 

The detailed estimation suggests that nominal and real household incomes were 7% higher in mining districts than those in non-mining districts. Accordingly, consumption was 11% higher and the probability of being poor was 7.5% lower in mining districts. These positive associations are mainly derived from household wage income. Specifically, household wage income was on average 7% higher in mining districts. In contrast, other income sources such as welfare, livestock income, consumption from own household production, household business income were not significantly different between mining and non-mining districts. Mining activities tend to increase the aggregate demand in the local economy, but this effect is weak in Mongolia. As a result, prices of household daily consumption goods and home renting do not differ between mining and non-mining districts. However, some well-being indicators such as employment and illness of household members were estimated lower in mining districts.

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