Living under ecosystem degradation: Evidence from the mangrove–fishery linkage in Indonesia
Yuki Yamamoto
Abstract
This study examines the impacts of ecosystem degradation on social welfare, focusing on the mangrove–fishery linkage in Indonesia. Using nationally representative household data combined with satellite information on spatiotemporal mangrove loss, the study finds that fishery households experienced a decline in annual income ranging from 5.3% to 9.8% in response to a 1% increase in mangrove loss in the region. Under the income shock, fishery households increased their labor input and decreased their non-food consumption; however, they continued being part of the fishery industry. Furthermore, according to a back-of-the-envelope calculation, the potential economic value of mangrove conservation, estimated in terms of fishery production reached 22,861 US$/hectare/year. This makes conservation substantially more cost-effective than alternative land uses, such as aquaculture and oil palm plantations. These findings highlight the need to support mangrove forest conservation to achieve sustainable development and ecosystem conservation.