This paper addresses factors influencing agricultural land use in rural households in El Salvador, with particular attention paid to the effects of income. Two linkages between the area a household farms and income per capita are critical. First, there is a precautionary demand for land that can be used for subsistence agriculture and this demand declines as income rises. Second, the area a household is able to farm goes up as income increases. Together, these two linkages imply that the relationship between agricultural land use and per capita income takes the shape of an Environmental Kuznets Curve (EKC).

Using panel data collected since 1995 in four biennial surveys of a nationally representative sample of rural households, we have analyzed agricultural land use at the household level. Evidence of an EKC relating farmed area to per capita income has been obtained. In addition, other factors influencing a household's use of natural resources have been examined.