Book Chapter
Endogenous Fertility and the Environment

A Parable of Firewood

This chapter discusses a model which examines interactions between population growth and the environment. In this model, various assumptions are made such as that fertility is endogenous; parents are not altruistic and have children only because of utility; environmental deterioration does not affect population (i.e., no ‘Malthusian’ mortality); time is measured in generations; and population pressure adversely affects the environment. The model gives a system of two non-linear difference equations. The main conclusion is that in the absence of parental altruism and ‘Malthusian’ mortality, the relation between population and environment is inherently unstable when fertility is endogenous. Thus, when parents are concerned only about the utility (net private benefits) and environmental resources are not priced (free), parents may choose the number of children which is optimal from their point of view but which will ultimately lead to environmental degradation.