Mangroves are ecologically important coastal wetland systems that are under severe threat globally. In Thailand, the main cause of mangrove conversion is shrimp farming, which is a major source of export income for the country. However, local communities benefit from many direct and indirect uses of mangrove ecosystems and may have a strong incentive to protect these areas, which puts them into direct confrontation with shrimp farm operators and, by proxy, government authorities. The article examines whether or not the full conversion of mangroves into commercial shrimp farms is worthwhile once the key environmental impacts are taken into account. The estimated economic value of mangrove forests to a local community is in the range of $27,264-$35,921 per hectare. This estimate includes the value to local communities of direct use of wood and other resources collected from the mangroves as well as additional external benefits in terms of off-shore fishery linkages and coastline protection from shrimp farms. The results indicate that, although shrimp farming creates enormous private benefits, it is not so economically viable once the externalities generated by mangrove destruction and water pollution are included. There is also an incentive for local communities to protect mangroves, which in turn implies that the rights of local people to guard and protect this resource should be formally recognized and enforced by law. (JEL Q2, Q12, O1) *

Mangroves are ecologically important coastal wetland systems that are under severe threat globally. In Thailand, the main cause of mangrove conversion is shrimp farming, which is a major source of export income for the country. However, local communities benefit from many direct and indirect uses of mangrove ecosystems and may have a strong incentive to protect these areas, which puts them into direct confrontation with shrimp farm operators and, by proxy, government authorities. The article examines whether or not the full conversion of mangroves into commercial shrimp farms is worthwhile once the key environmental impacts are taken into account. The estimated economic value of mangrove forests to a local community is in the range of $27,264-$35,921 per hectare. This estimate includes the value to local communities of direct use of wood and other resources collected from the mangroves as well as additional external benefits in terms of off-shore fishery linkages and coastline protection from shrimp farms. The results indicate that, although shrimp farming creates enormous private benefits, it is not so economically viable once the externalities generated by mangrove destruction and water pollution are included. There is also an incentive for local communities to protect mangroves, which in turn implies that the rights of local people to guard and protect this resource should be formally recognized and enforced by law. Copyright 2001 Western Economic Association International.

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