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Do Tropical Forests Provide Natural Insurance? The Microeconomics of Non-Timber Forest Product Collection in the Brazilian Amazon

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  • Subhrendu K. Pattanayak
  • Erin O. Sills

Abstract

Tropical forests may contribute to the well-being of local people by providing a form of ``natural insurance.’ ’ We draw on microeconomic theory to conceptualize a model relating agricultural risks to collection of non-timber forest products. Forest collection trips are positively correlated with both agricultural shocks and expected agricultural risks in an event-count model of survey data from the Brazilian Amazon. This suggests that households rely on forests to mitigate agricultural risk. Forest product collection may be less important to households with other consumption-smoothing options, but its importance is not restricted to the poorest households.

Suggested Citation

  • Subhrendu K. Pattanayak & Erin O. Sills, 2001. "Do Tropical Forests Provide Natural Insurance? The Microeconomics of Non-Timber Forest Product Collection in the Brazilian Amazon," Land Economics, University of Wisconsin Press, vol. 77(4), pages 595-612.
    • Handle: RePEc:uwp:landec:v:77:y:2001:i:4:p:595-612
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    References listed on IDEAS

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    1. Shively, Gerald E., 1997. "Consumption risk, farm characteristics, and soil conservation adoption among low-income farmers in the Philippines," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 17(2-3), December.
    2. Gurmu, Shiferaw & Trivedi, Pravin K, 1996. "Excess Zeros in Count Models for Recreational Trips," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(4), pages 469-477, October.
    3. Reddy, S. R. C. & Chakravarty, S. P., 1999. "Forest Dependence and Income Distribution in a Subsistence Economy: Evidence from India," World Development, Elsevier, vol. 27(7), pages 1141-1149, July.
    4. Byron, Neil & Arnold, Michael, 1999. "What Futures for the People of the Tropical Forests?," World Development, Elsevier, vol. 27(5), pages 789-805, May.
    5. Anjini Kochar, 1999. "Smoothing Consumption by Smoothing Income: Hours-of-Work Responses to Idiosyncratic Agricultural Shocks in Rural India," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 50-61, February.
    6. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 103-114, Summer.
    7. Cavendish, William, 2000. "Empirical Regularities in the Poverty-Environment Relationship of Rural Households: Evidence from Zimbabwe," World Development, Elsevier, vol. 28(11), pages 1979-2003, November.
    8. Walker, Robert & Homma, Alfredo Kingo Oyama, 1996. "Land use and land cover dynamics in the Brazilian Amazon: an overview," Ecological Economics, Elsevier, vol. 18(1), pages 67-80, July.
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    More about this item

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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