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Market integration and natural resource use in developing countries: a linked agrarian-resource economy in Northern Honduras

Published online by Cambridge University Press:  22 October 2013

Dale T. Manning ,
J. Edward Taylor  and
James E. Wilen
Dale T. Manning
Affiliation:
Department of Agricultural and Resource Economics, Colorado State University, B304 Clark Bldg., Fort Collins, CO 80523-1172, USA. Tel: (970) 491-5706. Fax: (970) 491-2067. E-mail: dale.manning@colostate.edu
J. Edward Taylor
Affiliation:
Department of Agricultural and Resource Economics, University of California at Davis, and the Giannini Foundation of Agricultural Economics, USA. E-mail: taylor@primal.ucdavis.edu
James E. Wilen
Affiliation:
Department of Agricultural and Resource Economics, University of California at Davis, and the Giannini Foundation of Agricultural Economics, USA. E-mail: wilen@primal.ucdavis.edu
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Abstract

Most resource management studies model the resource in isolation from the rest of the economy of which it is part. In many developing economies, agents participate in multiple activities, creating linkages between resource exploitation and other sectors (e.g., agriculture). In Northern Honduran fishing communities, households allocate effort to fishing according to the opportunity cost of their time, which depends on returns in other activities. We develop a model that demonstrates how market structure impacts fishery exploitation. Agricultural price increases have an ambiguous effect on labor allocated to fishing because they reduce the value of labor in fishing but increase the demand for fish via an income effect. The size and magnitude of impacts depend strongly on the tradability of inputs and outputs in the community economy. The findings point to a need to account for economic linkages and market structure when designing policies to reduce pressure on a natural resource.

Type
Research Article
Information
Environment and Development Economics , Volume 19 , Issue 2 , April 2014 , pp. 133 - 155
Copyright
Copyright © Cambridge University Press 2013 

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