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The Welfare Effect of Common Property Forestry Rights:Evidence from Ethiopian Villages

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  • Dambala Gelo

    ()
    (Department of Economics, University of Pretoria)

  • Steven F. Koch

    ()
    (Department of Economics, University of Pretoria)

Abstract

In this study, welfare impacts associated with a unique common-property forestry program in Ethiopia were examined. This program is different from other programs, because it is two-pronged: a community forest is developed and additional support is provided for improved market linkages for the community’s forestry products. The treatment effects analysis is based on both matching, which assumes random treatment assignment conditional on the observable data, and instrumental variable (IV) methods, which relax the matching assumptions. Data for the analysis is taken from selected villages in Gimbo district, southwestern Ethiopia. The program was found to raise the average welfare of program participant households. Correcting for selection into the program led to both increased welfare impacts and less precise estimates, as is common in IV analyses. The analysis results underscore the benefits to be derived from expanding the current forestry management decentralization efforts, although these benefits, given the design of the program, cannot be separated from the benefits to be derived from increasing market access for forestry products. However, the evidence suggests that placing property rights in the hands of those closest to the forest, combined with improved forest product market linkages, offers one avenue for both rural development and environmental improvement.

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Bibliographic Info

Paper provided by University of Pretoria, Department of Economics in its series Working Papers with number 201123.

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Length: 29 pages
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:pre:wpaper:201123

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Keywords: community forestry; treatment effects; IV; matching and Ethiopia;

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  1. Edmonds, Eric V., 2002. "Government-initiated community resource management and local resource extraction from Nepal's forests," Journal of Development Economics, Elsevier, Elsevier, vol. 68(1), pages 89-115, June.
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  14. Abadie, Alberto, 2003. "Semiparametric instrumental variable estimation of treatment response models," Journal of Econometrics, Elsevier, Elsevier, vol. 113(2), pages 231-263, April.
  15. Angrist, Joshua D & Graddy, Kathryn & Imbens, Guido W, 2000. "The Interpretation of Instrumental Variables Estimators in Simultaneous Equations Models with an Application to the Demand for Fish," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 67(3), pages 499-527, July.
  16. Yau L.H.Y. & Little R.J., 2001. "Inference for the Complier-Average Causal Effect From Longitudinal Data Subject to Noncompliance and Missing Data, With Application to a Job Training Assessment for the Unemployed," Journal of the American Statistical Association, American Statistical Association, American Statistical Association, vol. 96, pages 1232-1244, December.
  17. Kassie, Menale & Shiferaw, Bekele & Muricho, Geoffrey, 2010. "Adoption and Impact of Improved Groundnut Varieties on Rural Poverty: Evidence from Rural Uganda," Discussion Papers, Resources For the Future dp-10-11-efd, Resources For the Future.
  18. Delacote, Philippe, 2007. "Agricultural expansion, forest products as safety nets, and deforestation," Environment and Development Economics, Cambridge University Press, Cambridge University Press, vol. 12(02), pages 235-249, April.
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