Consequences of Protected Areas for Household Forest Extraction, Time Use, and Consumption: Evidence from Nepal

Many forest protected areas (PAs) are located in developing countries, where forests are a major source of food and fuel. Thus, biodiversity conservation may have unintended consequences on welfare of people in local communities. To explore this issue, we examine the effects of the new PAs in Nepal established during 1995–2003. Using the Nepal Living Standard Survey collected in 1995/1996 and 2003/2004, we evaluate the effects of these new PAs on household consumption, wood collection, and time use. Our estimates suggest that the establishment of PAs reduce the average wood collection by 20–40% compared to the period prior to PA establishment, with greater impact when PAs are strictly managed. We find evidence that households adjust to the new PAs with at least modest shifts to fuel purchased in market but not by using fuel conserving stoves, and that PAs are ineffective when climate makes fuelwood for heating essential or if households are in regions with large dependence on wood as a fuel. Finally, while wood collection reductions could lower household welfare, we find no evidence that PAs trigger either large decreases or increases in total consumption or consumption of food.