title: Health Shocks and Natural Resource Management: Evidence from Western Kenya.
abstract: Poverty and altered planning horizons brought on by the HIV/AIDS epidemic can change individual discount rates, altering incentives to conserve natural resources. Using longitudinal household survey data from western Kenya, we estimate the effects of health status on investments in soil quality, as indicated by households' agricultural land fallowing decisions. We first show that this effect is theoretically ambiguous: while health improvements lower discount rates and thus increase incentives to conserve natural resources, they also increase labor productivity and make it more likely that households can engage in labor-intensive resource extraction activities. We find that household size and composition are predictors of whether the effect of health improvements on discount rates dominates the productivity effect, or vice-versa. Since households with more and younger members are better able to reallocate labor to cope with productivity shocks, the discount rate effect dominates for these households and health improvements lead to greater levels of conservation. In smaller families with less substitutable labor, the productivity effect dominates and health improvements lead to greater environmental degradation.
authors.affiliation: New York University.
authors.forename: Maria
authors.initials: M
authors.lastname: Damon
authors.affiliation: University of California, San Diego and NBER.
authors.forename: Joshua Graff
authors.initials: JG
authors.lastname: Zivin
authors.affiliation: University of North Carolina at Chapel Hill and BREAD.
authors.forename: Harsha
authors.initials: H
authors.lastname: Thirumurthy
keywords: HIV/AIDS; Health and environment; environmental degradation; health shocks