Conservation of forest through provision of alternative sources of income; evidence from rural households in Northern Pakistan

Abstract

The collection of forest products by indigenous communities is the main cause of deforestation and a major<br />obstacle to efficient forest management. This study develops a time allocation model for a representative household<br />living in the peripheries of the forest. It is assumed that the household allocates their labour time between three activities:<br />agriculture, forest product extraction, and off-farm activities. Households maximize their net income subject to the<br />available forest resources. Using the Optimal Control Theory and applying the unique and global maxima, the results<br />of the comparative static and dynamic analyses suggest that higher agricultural efficiency, agricultural output prices,<br />and higher off-farm wages maximize the forest stock. Besides that, knowledge of forest extraction and farming may also<br />yield the higher equilibrium of forest stock while higher forest and input prices encourage forest resource extraction.<br />The result from the tobit analyses of a socio-economic survey from the Malakand Division forest in Pakistan provides<br />supportive empirical evidence.