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The economics of smallholders’ forestland-use decisions : implications for afforestation programs

University of British Columbia

The traditional discipline of forest economics has largely overlooked smallholders’ forestland-use decision-making process, which is perplexing given that they are the most numerous type of forest manager in the world. To address this gap, this thesis advances the literature on the economic decision-making context of smallholders’ forestland-use decisions. This advancement is critical to improving the design of smallholder afforestation programs. This research gap is addressed in this thesis through three research chapters. The first research chapter proposes a theoretical construct for modelling smallholders’ forestland-use decisions. The second research chapter assesses the relative contribution of smallholders’ preferences towards the non-market values of trees in their forestland-use decisions and psychometrically segments smallholders based on those preferences. The third research chapter describes and estimates a model of smallholders’ participation in tree product markets using a combination of smallholder-specific transaction costs, shadow prices and preferences. The first research chapter is theoretical whereas the second and third research chapters are empirical using data collected from a smallholder afforestation program in Nicaragua that is currently underway. For the last two research chapters, I conducted a total of 630 surveys and 1 818 discrete choice experiments with 210 smallholders over a 12-month period. My research findings suggest that smallholders’ forestland-use decisions are governed by very different principles than those proposed in much of the existing forest economics literature. My findings are best understood in an agricultural context of competing uses for household assets and interdependent consumption and production decisions. I argue that due to transaction costs, market prices are no longer representative of decision prices; rather these prices are shaped by both endogenous smallholder-specific preferences, and characteristics of the household, farm and landscape. Forest production strategies range from natural regeneration on uncultivated land to intensive management of the forest resource to produce market and non-market values. In the absence of profitable market opportunities, non-market values play a much more important role in smallholders’ forestland-use choices than previously believed. My research offers a new approach for analyzing smallholders’ forestland-use decisions and provides a new set of tools to better assess, design, and target smallholder afforestation program policies.

Text

2017-10-04

Attribution-NonCommercial-NoDerivatives 4.0 International

http://hdl.handle.net/2429/63204

Forestry

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/4.0/