Journal of Forest Economics 26 (2017) 56–62 Contents lists available at ScienceDirect Journal of Forest Economics jo ur nal ho me p age: www.elsevier.com/locate/jfe Rural households’ participation in charcoal production in Zambia: Does agricultural productivity play a role? Brian P. Mulenga a,∗ , Protensia Hadunka a , Robert B. Richardson b a Oklahoma State University b Department of Community Sustainability Michigan State University, East Lansing, Michigan 48824-1222, USA a r t i c l e i n f o Article history: Received 29 June 2016 Accepted 23 January 2017 Available online 6 March 2017 JEL classification: Q15 Q23 Keywords: Agricultural productivity Charcoal Forest Zambia a b s t r a c t The study uses a nationally representative dataset of smallholder farmers in Zambia to determine the effect of agricultural productivity on households’ participation in charcoal production. An instrumental variable probit approach is applied to account for the endogeneity of agricultural productivity in house- hold’s charcoal participation decision. We find a negative and significant effect of agricultural productivity on household’s likelihood of participation in charcoal production. Results also show that higher education, income, asset value, and participation in off-farm employment opportunities reduce the likelihood of par- ticipation in charcoal production. Therefore, interventions seeking to reduce charcoal production in rural Zambia could benefit from improving smallholder agricultural productivity, incomes, asset base, and off- farm employment creation. However, interventions need not lose sight of other important macro-level factors. © 2017 Department of Forest Economics, Swedish University of Agricultural Sciences, Ume ˚ a. Published by Elsevier GmbH. All rights reserved. Introduction In Zambia like many other parts of sub-Saharan Africa (SSA), charcoal is one of the most important sources of energy for cook- ing and space heating among urban households. A comprehensive review of literature on charcoal and livelihoods in SSA by Zulu and Richardson (2013) indicates that about 80% of the urban popula- tion in the region relies on charcoal for cooking. Furthermore, a study by Tembo et al. (2015) on cooking fuel choice among urban households in Zambia finds 82% of urban households to be charcoal users. Demand for charcoal is likely to remain high in the foresee- able future, owing to the rising urban population, erratic electricity supply, high electricity tariffs, and few affordable alternatives. In addition most SSA countries are still struggling to formulate con- crete policies promoting alternative energy sources. On the supply side, almost all the charcoal is produced in rural areas but consumed in urban areas, with the majority of produc- ers being smallholder farmers (Tembo et al., 2015; Kalinda et al., 2013; Mwitwa and Makano, 2012; Vinya et al., 2012). In fact, even if charcoal producers may not necessarily be farmers who pro- duce enough for subsistence and/or sale, they usually have a small ∗ Corresponding author. E-mail addresses: pingulani@yahoo.com (B.P. Mulenga), rbr@msu.edu (R.B. Richardson). piece of land for food production within the home (Mulenga et al., 2014). Thus, charcoal is an important source of income for rural smallholder farmers, providing a steady flow of income for pro- ducers throughout the year (Mwitwa and Makano, 2012). However, charcoal has also been linked to a number of adverse environmen- tal and health effects. These include localized deforestation and degradation, emission and inhalation of carbon monoxide during production. One of the longstanding debates regarding charcoal in SSA and Zambia in particular, is its effect on deforestation and forest degradation. In Zambia, charcoal has been identified as one of the main drivers of deforestation and degradation (Tembo et al., 2015; Government of the Republic of Zambia, 2014; Vinya et al., 2012). With the projected increase in charcoal demand and consequently production, there is need for analyses that would inform the design of interventions aimed at reducing charcoal production, without jeopardizing the livelihood of its producers. Given that majority of charcoal producers in Zambia are smallholder farmers, understand- ing the interaction between charcoal production and agricultural productivity is a useful input in designing such interventions. A number of studies in Zambia and SSA identify low agricul- tural productivity and low agricultural income as being among the important household level supply side drivers of charcoal production (Arnold et al., 2006; Chidumayo, 2002; Mwitwa and Makano, 2012; Zulu and Richardson, 2013). These studies provide a foundation for understanding the linkages between agricultural productivity and participation in charcoal production. However, http://dx.doi.org/10.1016/j.jfe.2017.01.001 1104-6899/© 2017 Department of Forest Economics, Swedish University of Agricultural Sciences, Ume ˚ a. Published by Elsevier GmbH. All rights reserved.