The Effect of Risk, Time Preference, and Poverty on the Impacts of Forest Tenure Reform in China
Year: 2011
Type: dissertation
Abstract: Forest degradation has steadily increased throughout much of the world. The cause of this continued degradation is complex and multifaceted but there is a growing realization that a key cause, especially in developing countries, is insecure rights to ownership and use of forest resources. This realization coupled with a call for pro-poor forestry policy has stimulated the recent trend in forest policy toward strengthening property rights for forest resources by transferring property rights from the state to communities and individuals, giving them defined rights to manage and extract forest resources. However, a big puzzle remains unsolved—such reforms on property rights have not consistently led to the intended sustainable resource use and management, particularly in developing countries. The overall goal of this dissertation research is to offer insight into why forest tenure reforms may not always lead to their intended effects by focusing on how an individual’s preferences over time and risk affect individual responses to forest tenure reforms. Since forest management involves dynamic decision making with uncertainty in future returns, individuals’ forest management decisions, as well as their responses to forest tenure reforms, will depend on: 1) how an individual perceives preference for income today versus the future (time preference), and 2) an individual’s attitude towards risk (risk preference). For example, even if individuals are given secure property rights, those with strong preference for current benefits (most commonly observed among the poor) may have the incentive to use forest resources faster. Failure to recognize the impacts of time and risk preferences of individuals may result in outcomes that policy maker sought to prevent. Furthermore, forest tenure reforms are often implemented in areas where the poverty rate is high. Those living in poverty are often assumed to have both high discount rates (i.e., impatient) and high levels of risk aversion, which make them less likely to make investments. Such characteristics may also hinder the intended effects of forest tenure reforms. This study examines these issues in the context of rural China, where a large-scale reform of forest property rights is being implemented in areas where the poverty rate is still high. To examine these issues, this dissertation research has three objectives: 1) identify the impact of forest property rights reforms on forest management decisions and how individual risk and time preferences may augment those impacts; 2) examine the correlation between time and risk preferences and poverty; and 3) identify the effect
Author: Sullivan, Karen Anne
Institution: University of Rhode Island
Language: English
Subfield: Global and Planetary Change
Field: Environmental Science
Domain: Physical Sciences
SDG: Life on land
Open Access status: green
OpenAlex ID: W1561548200