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Time Preference and Natural Resource Use by Local Communities: The Case of Sinharaja Forest in Sri Lanka

Author

Listed:
  • Herath Gunatilake

    (Asian Development Bank)

  • W. A. R. Wickramasinghe

    (University of Amsterdam)

  • Piyasena Abeygunawardena

    (Asian Development Bank)

Abstract

Empirical studies on the impact of the individual rate of time preference (IRTP) on natural resource use are scarce. This paper investigates the impact of IRTP on forest resources harvesting from the Sinharaja Man and Biosphere Reserve in Sri Lanka. The impact of IRTP on the harvest rate of forest resources was tested using a simultaneous equation model. Analysis of the determinants of IRTP shows that the base value and age of the respondents negatively influence the IRTP while risk perception positively influences the IRTP. More importantly, low income induces a higher IRTP, indicating that poverty is an important determinant of the IRTP. Further, the results show that individuals with a higher rate of time preference harvest more forest resources. Overall, the results suggest that long-term strategies for management of nature reserves would require poverty alleviation in the peripheral communities, among other measures.

Suggested Citation

  • Herath Gunatilake & W. A. R. Wickramasinghe & Piyasena Abeygunawardena, 2007. "Time Preference and Natural Resource Use by Local Communities: The Case of Sinharaja Forest in Sri Lanka," ADB Economics Working Paper Series 100, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0100
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    References listed on IDEAS

    as
    1. C. Price, 1991. "Do High Discount Rates Destroy Tropical Forests," Journal of Agricultural Economics, Wiley Blackwell, vol. 42(1), pages 77-85, January.
    2. Holden, Stein T. & Shiferaw, Bekele & Wik, Mette, 1998. "Poverty, market imperfections and time preferences: of relevance for environmental policy?," Environment and Development Economics, Cambridge University Press, vol. 3(1), pages 105-130, February.
    3. Kerkvliet, Joe & Nebesky, William, 1997. "Whaling and Wages on Alaska's North Slope: A Time Allocation Approach to Natural Resource Use," Economic Development and Cultural Change, University of Chicago Press, vol. 45(3), pages 651-665, April.
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    Keywords

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    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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