AN EMPIRICAL INVESTIGATION OF ACTIVITY CHOICE, LABOR ALLOCATION, AND FOREST USE IN SOUTHERN MALAWI

In this paper we explore forest use and activity choice among low-income households in Malawi. Using data from three villages in southern Malawi we investigate factors related to forest use by jointly estimating four labor share equations for forest use, maize production, wage-work, and self-employment. This approach allows us to examine factors influencing competing and synergistic livelihood strategies simultaneously undertaken by households living at the forest margin. Results from constrained ML estimation indicate greater incentives to degrade forests where the returns to forest use are high. Factors that reduce pressure on forests include availability of low-cost fuel substitutes, tree planting on the farm, favorable returns to wage-work and opportunities in the self-employment sector. We find that wealth is inversely related to forest pressure.