Economics Research Institute Study Paper
Utah State University Department of Economics
Copyright for this work is held by the author. Transmission or reproduction of materials protected by copyright beyond that allowed by fair use requires the written permission of the copyright owners. Works not in the public domain cannot be commercially exploited without permission of the copyright owner. Responsibility for any use rests exclusively with the user. For more information contact the Institutional Repository Librarian at email@example.com.
This paper explores the interrelationship between poverty, risk, and deforestation by small farmers in the low-income tropics. A nonseparable household model reveals how exogenous shocks to the mean or variance of a food price distribution affect peasants' incentives to clear forest. The resulting links between food price policy, farmer behavior, and deforestation offer an innovative explanation of the vicious cycle of peasant immiserization and tropical deforestation. An intriguing, testable hypothesis also emerges: market-oriented reforms that increase the mean and variance of food prices may inadvertently stimulate deforestation in economies in which a sizable proportion of farmers are net buyers.
Barrett, Christopher B., "Stochastic Food Prices and Slash-and-Burn Agriculture" (1997). Economic Research Institute Study Papers. Paper 116.