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The Welfare Effect of Common Property Forestry Rights:Evidence from Ethiopian Villages

Author

Listed:
  • Dambala Gelo

    (Department of Economics, University of Pretoria)

  • Steven F. Koch

    (Department of Economics, University of Pretoria)

Abstract

In this study, welfare impacts associated with a unique common-property forestry program in Ethiopia were examined. This program is different from other programs, because it is two-pronged: a community forest is developed and additional support is provided for improved market linkages for the community’s forestry products. The treatment effects analysis is based on both matching, which assumes random treatment assignment conditional on the observable data, and instrumental variable (IV) methods, which relax the matching assumptions. Data for the analysis is taken from selected villages in Gimbo district, southwestern Ethiopia. The program was found to raise the average welfare of program participant households. Correcting for selection into the program led to both increased welfare impacts and less precise estimates, as is common in IV analyses. The analysis results underscore the benefits to be derived from expanding the current forestry management decentralization efforts, although these benefits, given the design of the program, cannot be separated from the benefits to be derived from increasing market access for forestry products. However, the evidence suggests that placing property rights in the hands of those closest to the forest, combined with improved forest product market linkages, offers one avenue for both rural development and environmental improvement.

Suggested Citation

  • Dambala Gelo & Steven F. Koch, 2011. "The Welfare Effect of Common Property Forestry Rights:Evidence from Ethiopian Villages," Working Papers 201123, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201123
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    References listed on IDEAS

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    Keywords

    community forestry; treatment effects; IV; matching and Ethiopia;
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