Risk, restrictive quotas, and income smoothing

  • Income shocks due to climate change or overexploitation can result in severe hardships for natural resource users which are unable to smooth consumption. Artisanal fishers in Chile vary in their ability to smooth consumption due to regulatory differences. Utilizing these regulatory differences, we find that survey participants that harvest species which are governed by restrictive quotas have preferences for more precau- tionary savings compared to survey participants whose harvest is not restricted. The inability to adjust harvest increases the importance of self-insurance through saving. Especially in developing countries, where formal saving opportunities are limited, poli- cies that aim at stabilizing resource productivity through restrictive quotas need to account for available consumption smoothing strategies to avoid unintended welfare losses.

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Author:Robbert Schaap, Florian DiekertORCiDGND, Exequiel Gonzalez-Poblete, Karin Loreto Silva Aedo
Frontdoor URLhttps://opus.bibliothek.uni-augsburg.de/opus4/103948
Publisher:Department of Economics, University of Heidelberg
Place of publication:Heidelberg
Type:Working Paper
Year of first Publication:2020
Publishing Institution:Universität Augsburg
Release Date:2023/04/24
Institutes:Wirtschaftswissenschaftliche Fakultät
Fakultätsübergreifende Institute und Einrichtungen
Wirtschaftswissenschaftliche Fakultät / Institut für Volkswirtschaftslehre
Fakultätsübergreifende Institute und Einrichtungen / Zentrum für Klimaresilienz
Wirtschaftswissenschaftliche Fakultät / Institut für Volkswirtschaftslehre / Professur für Umweltökonomik
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):Deutsches Urheberrecht