Participatory Forest Management and the Trade-off between Current and Future Consumption of Forest Produce: Evidence from Nepal

Institutional efficiency of the Community Forest User Groups (CFUGs) is critical in the trade-off between current and future consumption of fuel wood. This paper examines the impact of the attributes of the CFUG management and user members on households’ time preference for current consumption of fuelwood and estimates Marginal Rate of Substitution (MRS) between current and future consumption of fuel wood and Marginal Rate of Transformation (MRT) of current consumption of fuelwood into its future produce. Our findings suggest that the functioning mechanism of the CFUG that determines their institutional efficiency will be a major factor in determining the trade-off between current and future consumption of fuel wood.