This paper explores deforestation and asset accumulation among small scale farmers in tropical forests. In a two-state variable control model, forest clearing is an investment in land holdings and the productivity of forest clearing is a function of non-land assets like chainsaws. Comparative static analyses demonstrate that: (1) the addition of non-land asset accumulation options may or may not change the impacts of policy measures on deforestation, depending on labor market conditions; and (2) discount rate decreases (through for example credit subsidies) offer the prospect of a win-win scenario-- forest protection and asset accumulation-- only when an active labor market exits.
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2000 Annual meeting, July 30-August 2, Tampa, FL with number
21786.
Length: Date of creation: 2000 Date of revision: Handle: RePEc:ags:aaea00:21786
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