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Producers' Well-Being and Natural Resource Extraction: The Eaglewood Trade in Papua New Guinea

  • Nicolas Gerber and Anik Bhaduri

Abstract

We illustrate how natural resource dependent and isolated communities manage their forest stock. Our model is based on field observations of the Eaglewood trade in Papua New Guinea. Using a dynamic model of household utility maximization and simulations, we analyze the impact of variations in the (monopsonistic) resource price on the households’ consumption choices and their allocation of effort across depletive and nondepletive activities. The stock of forest is embedded directly in the households’ utility function (existence value) and in their (nonseparable) production and consumption functions. We show that poverty (in production assets) does not inevitably lead to stock depletion.

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Copyright

This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.

Corresponding author

Correspondence: Nicolas Gerber ■ Center for Development ResearchWalter Flex Str. 353113 Bonn, Germany ■ Phone +49.228731883 ■ Email ngerber@uni-bonn.de.

Footnotes

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We are very thankful to an anonymous reviewer, whose comments greatly helped in improving the paper. We also express gratitude to participants of a session at the EAERE annual conference 2015 in Helsinki for discussions, and to Fridrik Mar Baldursson, discussant for our paper. His thoughtful comments were well aimed and contributed to better position our paper. Any remaining mistake is our responsibility.

The primary data referred to in this paper were collected during a field mission for Traffic Oceania in 2002. The paper reflects our views only.

Footnotes

References

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Producers' Well-Being and Natural Resource Extraction: The Eaglewood Trade in Papua New Guinea

  • Nicolas Gerber and Anik Bhaduri

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