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Welfare implications of tropical forest conservation: the case of Ruteng Park

Butry, D. and S. Pattanayak

In 1993, the Indonesian government established the Ruteng Nature Recreation Park in western Flores. Subsequently, the government banned all timber extraction in and around the park's sub-tropical forest to promote biodiversity and watershed protection. This study quantitatively examines the role that tropical forest conservation has on the development of the local economy, and tests hypotheses regarding the local use of and dependence on the tropical forest. Microlevel data is taken from a rich socioeconomic survey administered to local Manggarai households residing within the park's buffer zone. This information is used to quantify the size of forest incomes, and to estimate a household profit function to characterize forest use, test for wealth differences, and identify policy levers for Ruteng Park. Given the large number of households without forest profits or an observable reservation price, a sample selection model ("Heckit analysis") is used on the forest profits censored data. Results indicate that there is a significant reliance on the forest, as forest products make up approximately 30% of total income. Furthermore, poorer households disproportional depend on forest access than do their wealthier counterparts. The policy options explored include limiting forest entry, via a tax or subsidy system.

Fiscal Year: fy00 ·  Problem Area: pa98-5 ·  Theme: cctrgnas ·  Source: resunit   <== Explain

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