Doctoral Dissertation Research: The Effect of Risk, Time Preference, and Poverty on the Impacts of Forest Property Rights Reform

University Of Rhode Island, Kingston RI

Investigators

Abstract

This dissertation research examines how individual preferences over time (present vs. future) and risk can affect people's forest management responses to strengthened forest property rights. In an effort to stem on-going degradation of the world's forests, many developing countries have implemented property right reforms that transfer responsibility for these resources from the state to communities and individuals, who can then make their own decisions in managing and harvesting the forests. The goal of such reforms is to encourage sustainable resource use; however, too often reform efforts have failed to achieve this goal. Contrary to the goal of the reform, individuals with a strong preference for immediate benefits or who are unwilling to take future risks (both of which are common among the poor) may use the forest resources faster even when given stronger property rights. This research examines these issues in the context of rural China, where a large-scale reform of forest property rights has been implemented in areas where the poverty rate is still high. This research uses field experiments that involve real monetary rewards to capture individual time and risk preferences of forestholders and then integrates the field experiment data with household-level survey data in a framework to identify how changes in household's forest investment (e.g., afforestation, labor, etc.) in response to stronger property rights depends on their preferences over time and risk. This research will add to the existing literature on the effectiveness of property rights to encourage sustainable natural resource management by examining the heterogeneity in how people respond to property rights reform depending on individual preferences. Also, this research will link preferences elicited in experiments to behavioral responses to institutional reforms as few previous studies have done. The outcome of this research is important to policymakers in China and elsewhere because it will identify circumstances in which property rights reform may not work as intended.