Impacts of buffer zone policy on household income: Evidence from Chitwan National Park, Nepal

Abstract

Providing incentives to local communities to mitigate negative impacts of protected areas is an important component of conservation policy. Incentives may take various forms, including direct payments and income diversification training. For a case study of Chitwan National Park in Nepal, we evaluate the welfare effects of incentives delivered to buffer zone communities in the form of income diversification training. Evidence on the effect of such incentives on household welfare is limited. We evaluated the welfare effects in two ways. First, we measure the economic effects of living within the buffer zone, and second, we evaluate the effectiveness of two training interventions namely, income-generating training and tourism development training on increasing household income. We surveyed 728 households and used a quasi-experimental method (Propensity Score Matching). Results suggest that households living inside the buffer zone have 19 percent higher per capita household income than similar households living outside. Notably, income-generating training does not lead to an increase in household income, whereas tourism development training results in a substantial 52 percent growth. Our findings from Chitwan National Park suggest that conservation efforts do not necessarily adversely affect local communities. Interventions such as training programs can increase income, but are most effective when they allow households to take advantage of economic activities, such as tourism, linked to a protected area. This highlights the importance of crafting well-designed and targeted policy interventions that simultaneously enhance conservation goals and benefit local people.