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This paper develops four agricultural household models of forest clearing – as both an input for current production and an investment in future production – over two periods under distinct land and labor market institutions. Five different effects of policies on farmers' forest clearing decisions are identified. Careful comparison of their relative magnitudes reveals (potential) pro-forest policies under distinct market conditions. In Latin American countries, poor early settlers are often bid off their cleared land after or without cultivation by wealthy large holders. With this 'sell-out effect,' price transfer and technological transfer for soil management targeting poor colonists and policy reforms eliminating land price distortions are recommended to arrest deforestation. On the other hand, especially in places where land transaction opportunities are nil like Sub-Saharan African countries, policies promoting non-agricultural activities among poor farmers are needed.

"In this paper we analyze income tax design in a two member household labor supply model where time spent on consumption together by the two household members is valued differently from time spent apart. We treat consumption as a non excludable public good to members of the household; one example would be where all household members or one alone can watch TV. When jointly consumed, however, TV services are valued more highly than the same consumption undertaken separately. We use this model to numerically investigate the welfare implications of different tax structures. In sharp contrast to existing literature, our results suggest the desirability of subsidizing secondary worker's labor supply. We also relate our discussion to existing individual-household tax unit literature"--National Bureau of Economic Research web site