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Economic policies and the environment: the case of tree planting on low-income farms in the Philippines

Published online by Cambridge University Press:  01 February 1998

GERALD E. SHIVELY
GERALD E. SHIVELY
Affiliation:
Department of Agricultural Economics, Purdue University, West Lafayette, IN 47907-1145, USA
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Abstract

This paper investigates the potential for economic policies to influence environmental outcomes in low-income agriculture. The analysis focuses on how changes in agricultural prices influence land-use decisions and environmental indicators. Tree-planting decisions of low-income farmers in the Philippines are examined using a stochastic dynamic household model. Empirical analysis and dynamic simulations demonstrate that changes in relative prices and relative price risks are important determinants of tree-planting decisions. Results show that small holders are sensitive to risks associated with tree crops, but that price risk is not an insurmountable barrier to tree crop adoption. The relationship between cropping patterns and two environmental indicators - erosion and species diversity - are discussed.

Type
Policy Options
Information
Environment and Development Economics , Volume 3 , Issue 1 , February 1998 , pp. 83 - 104
Copyright
© 1998 Cambridge University Press

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