Activity Choice, Labor Allocation, and Forest Use in Malawi

Abstract

This article examines the determinants of activity choice affecting forest use among low-income households in Malawi. Data from three villages are used to estimate a system of household labor share equations for maize production, forest employment, and non-forest employment. A system estimation approach is used to identify factors influencing the competing and synergistic livelihood strategies which households undertake at the forest margin. Results from constrained maximum likelihood estimation indicate heightened incentives to degrade forests when returns to forest use are high. Factors reducing forest pressure include favorable returns to non-forest employment, secondary education of the household head, and wealth. (JEL J22, Q12)