Time Preferences and Natural Resource Extraction Behavior: An Experimental Study from Artisanal Fisheries in Zanzibar.

ABSTRACT

Natural resource users face a trade-off between present and future consumption. Using harmful methods or extracting unsustainably, lowers future consumption. Therefore, it is reasonable to posit that people with higher time preferences extract more as compared to people with lower time preferences. The present study combines experimental methods and questionnaire data in order to understand the relationship between individual time preferences and fishers' extraction behavior. We elicit individual time preferences using an incentivized experiment, linking the resulting time preference measures to extraction data from a questionnaire, as well as data collected from a framed Common Pool Resource (CPR) experiment. Both the experiments and questionnaire were conducted with artisanal fishers in Zanzibar. Our findings suggest that the relationship between time preferences and CPR extraction is not as straightforward as predicted by classical economic theory. In contrast to earlier studies, we find that fishers' time preferences are negatively correlated to their extraction rates. Our surprising findings can partly be explained by the fact that higher time preferences are associated with lower investment in extraction capability (the disinvestment effect of time preferences), and by fishers´ cognitive abilities.