Property rights, production technology, and deforestation: cocoa in Cameroon

In this article, we use a vintage‐capital model with risk of eviction to assess cocoa farmers' response to changes in their tenure security and to the introduction of a new, faster‐maturing cocoa variety. The model is calibrated with data from Cameroon in calendar year 2000, and then used to simulate the effects of institutional and technical change on farmer welfare and deforestation rates. Our findings can be summarized in three points. First, improved tenure security over cocoa fields increases farmers' consumption and welfare, but at the expense of more deforestation. Second, the introduction of new cocoa varieties with faster maturity and higher input response also unambiguously raises farmers' consumption and welfare. Doing so increases deforestation under insecure land tenure, but slows down deforestation under secure land tenure. Third, when introducing the two innovations together (more security and also new varieties), there is both an increase in welfare and a decline in deforestation. In sum, the availability of new cocoa cultivars calls for stronger tenure security, to accommodate investment in the new technology without increasing deforestation.     

Motives for household private transfers in Burkina Faso

Resource transfers among households have received considerable interest among economists in recent years. Two of the main reasons for the surge of interest in household transfers are the information on human nature conveyed by transfer behavior and the implication on income redistribution policy that private transfer might have. Empirical studies, however, provide mixed results on transfer behavior. This is because previous inquiries were confronted with several estimation issues and have focused on data from developed countries where private transfers are already small. This paper contributes to the literature on transfer behavior by using a multifaceted econometric approach to examine the motives of household transfers in Burkina, a low-income country with a well-documented tradition of gift exchanges. The findings suggest that risk sharing is not central to transfers. Altruistic transfers are apparent for the middle income class, but not at low income level. The evidence implies that crowding out may be minimal at low income level, suggesting that public transfers targeting poor households may be effective.     

Consumption smoothing? Livestock,insurance and drought in rural Burkina Faso

This paper explores the extent of consumption smoothing between 1981 and 1985 in rural Burkina Faso. In particular, we examine the extent to which livestock, grain storage and inter-household transfers are used to smooth consumption against income risk. The survey coincided with a period of severe drought, so the results provide direct evidence on the effectiveness of these various insurance mechanisms when they are the most needed. We find evidence of little consumption smoothing. In particular, there is almost no risk sharing, and households rely almost exclusively on self-insurance in the form of adjustments to grain stocks to smooth out consumption. The outcome, however, is far from complete smoothing. Hence the main risk-coping strategies which are hypothesized in the literature (risk sharing and the use of assets as buffer stocks) were not effective during the survey period.