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Non-pecuniary Value of Employment and Natural Resource Extinction

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  • Farzin, Y. Hossein
  • Akao, Ken-Ichi

Abstract

We assume that people value employment not only to earn income to satisfy their consumption needs but also as a means of community/social involvement that provides socio-psychological (non-pecuniary) benefits. We show that the latter incentive can encourage full employment harvesting resources and explain why poor resource-based communities may exhaust a natural resource in a finite time even if there is a sustainable path of resource consumption available. We show that communities could sustain their natural resources by using outside-the-community employment and economic diversification, but, to be effective, such policies must ensure that the outside wage rate and the initial capital stock are above certain minimum levels, which will be higher the longer these policies are delayed.

Suggested Citation

  • Farzin, Y. Hossein & Akao, Ken-Ichi, 2006. "Non-pecuniary Value of Employment and Natural Resource Extinction," Natural Resources Management Working Papers 12155, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemnr:12155
    DOI: 10.22004/ag.econ.12155
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    1. Farzin, Y. Hossein & Akao, Ken-Ichi, 2005. "Non-pecuniary Value of Employment and Natural Resource Extinction," Working Papers 190911, University of California, Davis, Department of Agricultural and Resource Economics.
    2. Y. Hossein Farzin & Ken-Ichi Akao, 2006. "When is it Optimal to Exhaust a Resource in a Finite Time?," Working Papers 2006.23, Fondazione Eni Enrico Mattei.

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    More about this item

    Keywords

    Resource /Energy Economics and Policy;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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