The impact of protected areas on poverty: evidence from Chile

In this paper, we estimate the causal relationship between protected areas and poverty in Chile from 1982 to 2002. Chile is part of the coalition of countries committed to protecting 30% of the planet by 2030; a decision that implies increasing the number of protected areas in the country. As a result of this decision, grows the national debate about the potential impacts of protected areas on the economy and society. By estimating the causal effect of protected areas on poverty, we aim to contribute to this debate in Chile. We use panel data and a quasi-experimental approach to estimate the causal effect. We find that establishing a protected area covering at least 17% of a unit's terrestrial area causes a reduction of 0.216 standard deviations in the poverty index. This result is not sensitive to arbitrary implementation choices. Additionally, we show that the effect is driven by the Patagonia region, the part of Chile with the largest amount of new protected areas during the time frame of this study. Besides showing the benefits of protected areas to society, we hope the findings presented here might also be used to attract new investments and financial support to protected areas currently underfunded in Chile.