Environmental and market determinants of economic orientation among rain forest communities: Evidence from a large-scale survey in western Amazonia

- We report on the first large-scale community livelihoods survey in western Amazonia.
- Many communities shifted economic focus since founding from forests to agriculture.
- Historical environmental endowments and market access shape economic activities.

Large scale surveys of rain forest livelihoods open up new possibilities for understanding the role of forest resources in the well-being of forest peoples but often overlook the factors that influence the diverse economic foci of forest-based communities. In this paper we describe the Peruvian Amazon Rural Livelihoods and Poverty (PARLAP) Project which seeks to identify the factors that contribute to rural poverty among indigenous and folk peoples through the first large scale survey conducted in this data poor region. Our paper draws upon a community census undertaken in four major river sub-basins in eastern Peru (n = 919 communities) and asks the question, how do environmental and market factors influence the economic orientation of rain forest communities? Recognizing that standard approaches that explain activity choice by current conditions are problematic because of potential endogeneity, we propose a new analytical framework that examines how historical (initial) conditions determine current conditions and thus current economic activities. Our approach produces a rich array of results that point to the importance of initial environmental endowments and market access of communities in shaping their economic orientation, interacting in different ways depending on the key natural resource upon which they rely.