THE BREN SCHOOL OF ENVIRONMENTAL SCIENCE AND MANAGEMENT Presents
Hossein Farzin, Professor Department of Agricultural and Resource Economics Friday, April 27, 2007 4:00 – 5:30 p.m. Bren Hall 1424 "Social Norm of Work and the Optimality of Resource Extinction" Part of a seminar series in Environmental Economics presented by the Economics and Environmental Science PhD training program
Abstract Departing from the standard economics assumption, we assume that people value work not only for earning income to satisfy consumption needs but also as a source of community/social involvement which provides socio-psychological satisfaction. We show that in closed, rural resource-based communities where sharing in the harvest work is a cultural norm, the socio-psychological satisfaction from work and adherence to work norm can induce full-employment harvesting, thus rendering it optimal to harvest a resource to extinction even if a sustainable resource consumption path is feasible. We show that such communities can sustain their natural resources either by using outside-the-community employment opportunities or by economic diversification. However, to be effective, such policies must ensure that the outside wage rate and the initial capital stock are above certain minimum levels, which will be higher the longer these policies are delayed. Professor Farzin earned his BA in economics from the University of Tehran, Iran, and his master's and PhD from Oxford University in England. He served both as a consultant and as an economist at the World Bank, and has lectured at Oxford, American University, Georgetown University, and UC Davis. Research areas: • Environmental and Natural Resource Economics • Development Ecopnomics • Microeconomic Theory • Risk and Uncertainty
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