Soil rrosion and smallholders' conservation decisions in the highlands of Ethiopia

Soil erosion is one of the most serious environmental problems in Ethiopia. Coupled with growing populations, falling per capita food production and w orsening poverty, loss of productive land due to land degradation undermine s rural livelihoods and national food security. Despite their awareness of the erosion problem, peasants' investments in land have been limited. We us e an applied nonseparable model to simulate conservation decisions. Pervasi ve market imperfections, poverty and high rates of time preference seem to undermine erosion-control investments. Lack of technologies which provide q uick returns to subsistence-constrained peasants also seem to deter such in vestments. Lower private incentives to internalize the intertemporal land d egradation externality may require public intervention. (C) 1999 Elsevier S cience Ltd. All rights reserved.