Endogenous time preferences of forest goods and community-based forest management

Kumar, Pradeep; Kant, Shashi

doi:10.1016/j.ecolecon.2019.03.016

Cited by 6 publications

(8 citation statements)

References 48 publications

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“…Our work appears to be the first to empirically elicit locals' discount rates and then depict their importance by applying them to a bioeconomic model of management. Elicited discount rates (median: 150%) are significantly higher than found in other studies (Kumar & Kant, 2019;Ubfal, 2016). High discount rates for the ecologi-cal domain would align with theory for common-pooled resources (Hartwick & Yeung, 1997).…”

Section: Discussionsupporting

confidence: 49%

“…Once we determined indifference points for individuals at each timeframe for each good, we calculated their discount rates (Equation 1). Some respondents said they would always choose the near-term option, implying infinite discount rates (see also Kumar & Kant, 2019). Respondents having infinite discount rates are consistent with economic theory for use of common-pool resources (Hartwick & Yeung, 1997).…”

Section: Empirical Analysismentioning

confidence: 75%

“…The focus of discounting studies has recently begun to broaden, making heterogeneity in individual choices more apparent. Personal demographics such as age (Attema, Bleichrodt, L'Haridon, Peretti-Watel, & Seror, 2018;Kumar & Kant, 2019) and respondents' country (Wang, Rieger, & Hens, 2016) can explain, in part, differences in individual discount rates. Individuals also discount different domains (e.g., health, financial, environmental) at different rates (Hardisty, Thompson, Krantz, & Weber, 2013;Ubfal, 2016).…”

Section: Introductionmentioning

confidence: 99%

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How pastoralists weight future environmental benefits when managing natural resources

Hyman

Gaoue

Tamou

et al. 2020

CONSERVATION LETTERS

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Natural resource management involves balancing benefits and costs that accrue through time. How individuals and local communities weight such tradeoffs can profoundly influence how they use and conserve resources. Our goal was to understand time preferences of future benefits for goods that are relevant for developing effective conservation strategies. We surveyed >500 Fulani in Benin about their time preferences regarding financial, ecological, and agricultural goods, summarizing these in the form of discount rates. In a discrete-time, constant annual form, our results were much higher (median: 150%) than values often discussed in literature. These discount rates declined through time; people valued the future more than would be assumed based on constant discounting. Discount rates were higher for financial goods than ecological or agricultural goods. We illustrate how our estimates of discount rates change recommendations for optimal management of forest resource harvesting in the tropics. While members of this grazing community discount future benefits at a high rate, they do so in ways that contrast with conventional economic theory and favor longterm use of nontimber forest products.

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Section: Discussionsupporting

confidence: 49%

Section: Empirical Analysismentioning

confidence: 75%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

How pastoralists weight future environmental benefits when managing natural resources

Hyman

Gaoue

Tamou

et al. 2020

CONSERVATION LETTERS

View full text Add to dashboard Cite

show abstract

“…While the above studies assume that the individual discount rates of forest-dependent communities are uniform for all goods and services, Kumar and Kant (2019) offer a different perspective and find that the people's discount rates in forest management communities are goods-specific. Specifically, Kumar and Kant report that the monthly mean discount rates are 0.67, 6.83, 55.49 and 3.47 for timber, fuel wood, grass and money.…”

Section: Review Of Literature On Time Discount Rate and Its Determinantsmentioning

confidence: 98%

“…Yet another limitation stems from the possible endogenous nature of time preferences. As Kumar and Kant (2019) show, the forest communities in a community-based forest management framework do not exhibit homogenous time preferences but have different time discount rates for different forestry goods and services and money. Kumar and Kant conclude that a majority show an infinite discount rate for forestry goods at the household level.…”

Section: Conclusion and Managerial Implicationsmentioning

confidence: 99%

Time Discount Rate of Forest-Dependent Communities: Evidence from Andhra Pradesh, India

Balakrishna

Virmani

2020

Vikalpa: The Journal for Decision Makers

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Executive Summary This study presents evidence on time discount rate of forest-dependent communities (FDCs) in the backdrop of the joint forest management program launched by the Government of India in 1990. The study uses data from two regions of the Indian state of Andhra Pradesh—Rayalaseema (a relatively dry forest region with low income) and the coastal region (relatively fertile forest and with higher income). We also identify socio-economic determinants of their patience levels and factors which distinguish the two regions. To elicit individual discount rates of FDCs members and their determinants, we use the choice task design methodology. Members from both regions were found to be highly impatient using the standard choice task design with the revealed time discount rate averaging 800% per annum. Members of FDCs from Rayalaseema were more impatient than their counterparts from the coastal region, although the statistical evidence is weak. We find no association between the income of members of FDCs and their time discount rate for both regions. Membership to caste categories showed a different response in both the regions, with members from the Scheduled Caste category and Other Backward Classes found to have a lower discount rate than those from the Scheduled Tribes category of Rayalaseema region and vice versa for the coastal region. For the coastal region, those with larger family size and heads of households were found to have a lower discount rate.

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Variation in preferences describing how to value the future among conservation practitioners and its implications for today's protection priorities

Hyman

Bouille

Zhu

et al. 2022

Biological Conservation

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Endogenous time preferences of forest goods and community-based forest management

Cited by 6 publications

References 48 publications

How pastoralists weight future environmental benefits when managing natural resources

How pastoralists weight future environmental benefits when managing natural resources

Time Discount Rate of Forest-Dependent Communities: Evidence from Andhra Pradesh, India

Variation in preferences describing how to value the future among conservation practitioners and its implications for today's protection priorities

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