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Land conservation policies and income distribution: who bears the burden of our environmental efforts?

Published online by Cambridge University Press:  25 July 2007

Earth Institute, Columbia University, 2910 Broadway, New York, NY10025. Email:


We analyze the impact of land conservation policies on income distribution using a two-sector model. We find that conservation policies can have important distributional effects through changes in rents and wages. We show how aggregate rents rise when protected areas increase despite the reduction of land availability. Simultaneously, real wages decrease in consequence of higher agricultural prices. These distributional changes also affect the efficiency of conservation policies since higher rents lead to deforestation elsewhere. Results suggest that Pareto improving compensation should also be aimed at agricultural workers.

Research Article
2007 Cambridge University Press

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I would like to thank Daniel Brou, Ken Chomitz, Jesus Fernandez, Geoffrey Heal, Alex Pfaff, Rajiv Sethi and Arthur Small for their valuable comments and their support. I would also like to thank seminar participants at University of California at Santa Barbara and Columbia University. Financial support from the Center for Economics, Environment and Society at the Earth Institute Columbia University is gratefully acknowledged.