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Measuring the welfare effects of forests: an application of the travel cost model

Published online by Cambridge University Press:  04 November 2019

Martha Rogers Open the ORCID record for Martha Rogers [Opens in a new window]
Martha Rogers*
Affiliation:
The Nature Conservancy, Arlington, VA, USA
*
*Corresponding author. E-mail: martha.rogers@tnc.org
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Abstract

In this paper, a travel cost model was applied to the case of firewood collection to assess how the inclusion of household fixed effects and how assumptions regarding conditions in the local labor market impacted resulting welfare estimates. To assess these impacts, a unique household panel data set from Kagera, Tanzania was used. It was estimated that, under the assumption of constrained labor markets, households in the Kagera region of Tanzania are willing-to-pay, on average, $120 per year (2016 USD) for access to local forests. These estimated figures were nearly 50 per cent higher when household fixed effects were excluded and nearly 10 per cent higher under the assumption of perfect labor markets. In addition, these results support previous research showing that, in many developing countries, households' demand for firewood is inelastic and that households would be willing to spend a significant amount of their resources on forest access.

Keywords

travel costagricultural productiondevelopmentenvironment

JEL classification

O13: Agriculture • Natural Resources • Energy • Environment • Other Primary Products Q56: Environment and Development • Environment and Trade • Sustainability • Environmental Accounts and Accounting • Environmental Equity • Population Growth
Type
Research Article
Information
Environment and Development Economics , Volume 25 , Issue 3 , June 2020 , pp. 244 - 266
Copyright
Copyright © Cambridge University Press 2019

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