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Group 2: Flores, Retzloff, Smith, Travis Article: “Willingness to accept compensation for the environmental risks of oil transport on the Amazon: A choice modeling experiment” This article attempts to examine the non-use value indigenous (poor) communities place on environmental protection/conservation. The traditional economic belief is that environmental quality is a luxury good that is too expensive for poor people, however, this article proves otherwise. While the study cannot be perfectly controlled to reflect 100% of the non-use values (and differentiate them from the direct use values), the evidence is suggestive that non-use values do exist in the poor indigenous communities in the Amazon. In ECON 280 (Development Economics), we frequently compared increases in income (capital deepening) to investments in human capital (education, healthcare, etc.). If the income of the impoverished increases, that does not necessarily mean that the poor will spend more on education and healthcare, which would improve their wellbeing--they could spend the money however they please. However, investments in healthcare and education will increase the poor’s well-being and thus give them more opportunities to attain higher paying jobs and a better life, which will in turn increase their income. One result we found most interesting in this article was that instead of monetary compensation (in the case of an oil spill), communities expressed strong preferences for better education and better healthcare (despite the fact that only approximately 62% of people surveyed indicated that they had not received greater than an elementary school education). In the context of this paper, we believe that investments in human capital would also decrease an individual’s dependence on the Amazon for work and resources, thus reducing the potential negative impact of an oil spill on that individual’s utility. After reading this article, we were left wondering about the true impacts of an oil spill on indigenous communities along the Amazon. The potentially devastating impacts are only briefly discussed in the paper, and the topic (we would imagine) could be an article in and of itself. Along the same lines, we are curious about the extent and occurrences of past oil spills in the Amazon and how they might have affected the survey results. In class, we touched on the idea of how the United States perspective on oil companies/spills (Exxon Valdez and the BP oil spill) might differ from the Brazilian perspective (according to what we have learned about it through this paper).
Toggle Commented Jan 31, 2014 on Forest Resources at Jolly Green General
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Jan 31, 2014