IDEAS home Printed from https://ideas.repec.org/p/ags/aaea10/61536.html
   My bibliography  Save this paper

Impact of Risk and Time Preferences on Responses to Forest Tenure Land Reform: Empirical Evidence from Fujian, China

Author

Listed:
  • Sullivan, Karen A.
  • Uchida, Emi
  • Xu, Jintao

Abstract

This research examines the effect of risk and time preferences on forest management responses to forest tenure land reforms in Fujian, China that began in 2002. The different extent of the reform and its different timing across regions provide a natural experiment to test how time and risk preferences affect a households’ forest investment response to the reform. Empirically, we combine original field experiment data on time and risk preferences collected among 103 households with an original panel survey data set collected among the same 103 households, which contains data for three years: 2000 (before the reform), 2005 and 2008 (after the reform) in a difference-in-differences framework. We examine three measures of forest management activity, including: the value of labor allocated to applying forest inputs, the expenditure on forest inputs, and the value of labor allocated to harvesting. The status of the forest tenure reform on each forest plot is captured by an indicator variable of whether or not the household has a forest certificate for the plot. Results indicate that forest plot certification has not had the expected impact of increasing investment in forest resources, in terms of labor to apply and expenditure on forest inputs (chemical fertilizer, pesticide and seed). However, forest plot certification has had the expected impact on harvesting behavior, as less harvesting labor was allocated to plots with forest certificates. Furthermore, results indicate that risk aversion, as well as a household’s liquidity constraint, have an impact on forest management responses to forest certification. The results of this paper have wide implications to policymakers in China and elsewhere by informing when property right reforms may not work as intended. The results indicate that instruments to deal with risks and poverty need to be coupled with such reforms in order to increase investment in long-term, productivity enhancing forest activities.

Suggested Citation

  • Sullivan, Karen A. & Uchida, Emi & Xu, Jintao, 2010. "Impact of Risk and Time Preferences on Responses to Forest Tenure Land Reform: Empirical Evidence from Fujian, China," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61536, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:61536
    DOI: 10.22004/ag.econ.61536
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/61536/files/DraftPosterTextAndTables.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.61536?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Glenn W. Harrison & Morten I. Lau & Melonie B. Williams, 2002. "Estimating Individual Discount Rates in Denmark: A Field Experiment," American Economic Review, American Economic Association, vol. 92(5), pages 1606-1617, December.
    2. Elaine Meichen Liu, 2008. "Time to Change What to Sow: Risk Preferences and Technology Adoption Decisions of Cotton Farmers in China," Working Papers 1064, Princeton University, Department of Economics, Industrial Relations Section..
    3. Elaine M. Liu, 2013. "Time to Change What to Sow: Risk Preferences and Technology Adoption Decisions of Cotton Farmers in China," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1386-1403, October.
    4. Fitsum Hagos & Stein Holden, 2006. "Tenure security, resource poverty, public programs, and household plot‐level conservation investments in the highlands of northern Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 34(2), pages 183-196, March.
    5. Robert T. Deacon & Henning Bohn, 2000. "Ownership Risk, Investment, and the Use of Natural Resources," American Economic Review, American Economic Association, vol. 90(3), pages 526-549, June.
    6. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    7. Maribeth Coller & Melonie Williams, 1999. "Eliciting Individual Discount Rates," Experimental Economics, Springer;Economic Science Association, vol. 2(2), pages 107-127, December.
    8. Bromley, Daniel W., 1989. "Property relations and economic development: The other land reform," World Development, Elsevier, vol. 17(6), pages 867-877, June.
    9. Godoy, R. & Kirby, K. & Wilkie, D., 2001. "Tenure security, private time preference, and use of natural resources among lowland Bolivian Amerindians," Ecological Economics, Elsevier, vol. 38(1), pages 105-118, July.
    10. Marc Jacobson & Joel De Castro & Vianca Aliaga & Julio Romero & MAllison Davis, 1998. "The Role of Tenure Security and Private Time Preference in Neotropical Deforestation," Land Economics, University of Wisconsin Press, vol. 74(2), pages 162-170.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tristan Le Cotty & Elodie Maître d’Hôtel & Raphael Soubeyran & Julie Subervie, 2018. "Linking Risk Aversion, Time Preference and Fertiliser Use in Burkina Faso," Journal of Development Studies, Taylor & Francis Journals, vol. 54(11), pages 1991-2006, November.
    2. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    3. Jindrich Matousek & Tomas Havranek & Zuzana Irsova, 2022. "Individual discount rates: a meta-analysis of experimental evidence," Experimental Economics, Springer;Economic Science Association, vol. 25(1), pages 318-358, February.
    4. Galarza, Francisco, 2009. "Choices under Risk in Rural Peru," MPRA Paper 17708, University Library of Munich, Germany.
    5. James Andreoni & Charles Sprenger, 2012. "Estimating Time Preferences from Convex Budgets," American Economic Review, American Economic Association, vol. 102(7), pages 3333-3356, December.
    6. Drichoutis, Andreas C. & Nayga, Rodolfo M., 2013. "Eliciting risk and time preferences under induced mood states," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 18-27.
    7. Königsheim, C. & Lukas, M. & Nöth, M., 2018. "Individual preferences and the exponential growth bias," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 352-369.
    8. Sawosri, Arieska Wening & Mußhoff, Oliver, 2020. "Risk and time preferences of farmers in India and Indonesia," EFForTS Discussion Paper Series 32, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    9. Juan Camilo Cardenas & Jeffrey P. Carpenter, 2005. "Experiments and Economic Development: Lessons from Field Labs in the Developing World," Middlebury College Working Paper Series 0505, Middlebury College, Department of Economics.
    10. Rose, Julia & Rose, Michael, 2019. "Ready-made oTree apps for time preference elicitation methods," Journal of Behavioral and Experimental Finance, Elsevier, vol. 23(C), pages 23-28.
    11. de Brauw, Alan & Eozenou, Patrick, 2014. "Measuring risk attitudes among Mozambican farmers," Journal of Development Economics, Elsevier, vol. 111(C), pages 61-74.
    12. Lata Gangadharan & Tarun Jain & Pushkar Maitra & Joe Vecci, 2022. "Lab-in-the-field experiments: perspectives from research on gender," The Japanese Economic Review, Springer, vol. 73(1), pages 31-59, January.
    13. Enrique Fatas & Juan A. Lacomba & Francisco Lagos, 2007. "An Experimental Test On Retirement Decisions," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 602-614, July.
    14. Jessica B. Hoel & Prachi Jain & Bridget Galaty, 2022. "JUST VENMO ME: Does form of payment affect risk taking and intertemporal choice?," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 8(1), pages 16-33, December.
    15. Andersen, Steffen & Harrison, Glenn W. & Lau, Morten I. & Rutström, E. Elisabet, 2014. "Discounting behavior: A reconsideration," European Economic Review, Elsevier, vol. 71(C), pages 15-33.
    16. BONAN Jacopo & LEMAY-BOUCHER Philippe & SCOTT Douglas & TENIKUE Michel, 2017. "Can Hypothetical Time Discounting Rates Predict Actual Behaviour: Evidence from a Randomized Experiment," LISER Working Paper Series 2017-03, Luxembourg Institute of Socio-Economic Research (LISER).
    17. Annemie Maertens & A. V. Chari & David R. Just, 2014. "Why Farmers Sometimes Love Risks: Evidence from India," Economic Development and Cultural Change, University of Chicago Press, vol. 62(2), pages 239-274.
    18. Kureishi, Wataru & Paule-Paludkiewicz, Hannah & Tsujiyama, Hitoshi & Wakabayashi, Midori, 2021. "Time preferences over the life cycle and household saving puzzles," Journal of Monetary Economics, Elsevier, vol. 124(C), pages 123-139.
    19. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    20. Schleich, Joachim & Gassmann, Xavier & Meissner, Thomas & Faure, Corinne, 2019. "A large-scale test of the effects of time discounting, risk aversion, loss aversion, and present bias on household adoption of energy-efficient technologies," Energy Economics, Elsevier, vol. 80(C), pages 377-393.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea10:61536. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.