Desertification from an economic perspective

Abstract

It is often asserted that desertification is a socially nonoptimal land use policy and that sustainable use is optimal. This paper analyzes this contention by developing a model that examines the optimal rate of desertification from the producer's perspective and from society's perspective. The results indicate that sustainable use is not necessarily optimal and that in some cases it might be optimal to completely desertify the land. Critical economic determinants of optimal land use policy are land-tenure arrangements, discount rates, and whether the selling price of the land at the end of the time horizon is a function of the soil's quality.