Forest Product Sale as Natural Insurance: The Effects of Household Characteristics and the Nature of Shock in Eastern Honduras

The rural poor are known to turn to tropical forest resources in times of need. But what explains differential use of this “natural insurance” policy among households? Drawing from a 1998 survey of 116 indigenous households in Honduras, this article shows that households sell forest products to pay for crop shortfalls and illness, but that loans from kin are a more common way to weather calamity. Young households with few liquidatable assets and little land are the most likely to sell forest products to self-insure. Development policies that build on the “natural insurance” concept should anticipate major variation within target populations; meanwhile, conservationists should recognize that the lack of formal safety nets in rural communities will motivate the sale of forest products.