Forest and Sea as Insurance among Fijians

This paper examines how forest and marine resources serve as insurance against a tropical cyclone using original household data gathered in rural Fiji. The fixed-effects estimator for a censored dependent variable controls for unobservable household heterogeneity that can cause bias. I propose a simple empirical strategy, which can be widely applied, to test whether a household intensifies labor activity to earn extra income to be shared under private risk-sharing arrangements. I find that while households abandon forest product gathering right after the cyclone, value-added handicrafts made of some forest products by women serve as self-insurance against crop damage after the emergency period and this is especially so among female-headed households. Fijians intensify fishing to augment mutual insurance for the recovery from village facility damage and housing damages experienced by others. I discuss how this distinct pattern emerges as private adjustments to cyclone relief delivered to the region.

How is disaster aid allocated within poor villages?

How disaster aid is allocated within poor villages is little understood. This paper examines risk-sharing institutions and social hierarchies as village self-allocation mechanisms. Original survey data from Fiji contain rich information about cyclone damage, traditional kin status, and aid allocations over post-disaster phases, at both household and kin-group levels. The paper shows under what conditions the performance of targeting aid to victims can significantly differ from overall risk-sharing outcomes determined by private transfers and aid (i.e., targeting gap). Elite domination can occur not only in aid allocation independent of damage, but also in targeting on damage (i.e., targeting bias).

Do chiefly systems discourage schooling?

An indigenous chiefly system can shape a country's economic growth and inequality through institutional development in its colonial history. This paper addresses this thesis by using original household survey data in rural Fiji, which contain unique information about traditional chiefly status, and Fijian coups as a natural experiment. It demonstrates that chiefly labor networks in non-farm occupations that originated from the British colonial policy persistently affected Fijians' schooling. Chiefly networks were effective for employment among male Fijians before and after 1970 independence, until the first coup occurred in 1987; then, their schooling strongly adjusted to structural changes in labor market. Those outside the chiefly network ? the majority of Fijians ? have always been discouraged from making education investments, because of low returns in the network-driven labor market. Without being directly constrained by this chiefly institution, Indians and Female Fijians outperformed male Fijians in higher education. Keywords: Chiefly system; Colonial policy; Labor network; Schooling; Fiji.

Fraud and Poverty: Exploring Ex Ante Victim Data

Fraud studies rely on potentially underreported/misreported victim data in developed countries, virtually ignoring developing countries. This paper proposes using ex ante victim data, to be collected before attempted victims become aware of the fraudulence, and examines recruitment fraud, which is tightly linked with poverty. In rural Fiji, almost one quarter of households were defrauded of application fees for labor migration. The bigger problem is indirect costs: Controlling for victim endogeneity reveals that households' false expectations about international remittances led to a significant reduction in the domestic private transfers victims received. The analysis sharply identifies who was victimized and why/why not.

Natural disasters and informal risk sharing against illness: networks vs. groups

Using original household panel survey data collected in rural Fiji, this paper demonstrates how informal risk-sharing institutions upon which poor people heavily rely in times of illness are vulnerable to natural disasters. First, household private cash-inkind transfers do not serve as insurance against illness in the relief phase (several months after the disaster); they do so only after pooled resources are recovered in the reconstruction phase (a few years later) (i.e., the resource effect). Second, risk-sharing arrangements are dependent on the history of labor-time transfers corresponding to housing damage: Only disaster non-victims are insured against illness, because victims have already received labor help for their rehabilitation from non-victims (i.e., the reciprocity effect). The paper also reveals that resource/reciprocity effects exist in endogenously formed networks and pre-formed groups, as risk-sharing pools to a similar degree. Not only do private transfers exchanged among households serve as insurance, but also, household contributions directly made to groups ? such as ritual gifts and religious donations ? contain risk- sharing components against illness among group members. Although the former finding is commonly evident in the literature, the latter is new. Network formation is directly related to pre-formed groups, especially kin and religious ones.

Do Local Elites Capture Natural Disaster Reconstruction Funds?

This paper examines the allocation of natural disaster reconstruction funds among cyclone victims in rural Fiji. During post-emergency periods, when good information about cyclone damage is available, do local elites, a powerful minority, capture housing construction materials? With effective targeting in both receipt and the amount received, local elites do not capture larger benefits. More severely affected victims are not early recipients, though, because the supply of reconstruction funds is limited during early periods. This invites early capture: Traditional kin elites receive benefits earlier than others in recipient villages.

Groups, Networks, and Hierarchy in Household Private Transfers: Evidence from Fiji

Although economists have extensively studied private transfers exchanged among households within a network, those exchanged directly with groups to which the household belongs ? such as ritual gifts, communal work, and church donations --- have received very limited attention. Using original household survey data gathered in rural Fiji, this paper shows that extant studies on across-household private transfers are incomplete for two reasons. First, group-based transfers are much greater than networkbased transfers because of significant contributions to groups for their provision of local public goods. Second, group-based transfers significantly influence network-based transfers through the social hierarchy: A comparison of various groups (e.g., kin and church groups) and social ranks (e.g., gender, disability, elite kin, and religious elite) indicates that network-based transfers adjust to hierarchy bias in group-based transfers among fixed members depending on the physical and social connections of groups and networks.

Economic models of shifting cultivation: a review

This chapter reviews farm-level economic models of shifting cultivation and those of deforestation and soil conservation related to shifting cultivation. Although economists have made significant progress in modeling shifting cultivation over the last two decades, extant economic models neither clearly distinguish between primary and secondary forests nor address potential roles of on-farm soil conservation in shifting cultivation. Developing a unified farm model of primary forest clearing, forest fallowing, and on-farm soil conservation is needed to examine effective policies for protecting primary forest and maintaining sustainable secondary fallow forest. The chapter points to promising avenues for future modeling.

Wealth Accumulation and Activity Choice Evolution Among Amazonian Forest Peasant Households

This paper examines investment and livelihood decisions among forest peasant households in the Amazonian floodplain. A dynamic household model of multiple asset accumulation and activity choice under risk and credit constraints is developed by incorporating natural resource use and human capital evolution. Asset portfolios and sectoral incomes are estimated and then simulated to investigate the endowment and lifecycle dependency as well as the convergence/divergence of asset accumulation and corresponding activity choices. Physical asset endowment (especially land) and different human capital evolutions across activities help to explain forest peasants' livelihood choices, distinctive asset portfolios, and divergent income outcomes over the lifecycle.