6. Conclusions
We develop an overlapping generation model of rural agricultural households to investigate the tradeoff between alternative modes of transfer, unexploited topsoil and human capital investment. Tenure security influences the underlying tradeoff, resulting in the current generation increasing conservation effort and decreasing human capital investment under greater tenure security. Consequently, the current generation switches from human capital investment to topsoil transfer under greater tenure security, when the modes of transfer are substitutable. Based on our theoretical findings and data availability, we hypothesize that more secure tenure is associated with higher conservation investment and lower human capital investment. We use the Bangladesh Household Income and Expenditure Survey (HIES) dataset, which contains data on household's expenditure on conservation investment (e.g., spending on forest seedling and compost fertilizer) and human capital investment (e.g., spending on children's educational and recreational activities), to test this hypothesis empirically. Our regression results suggest that this hypothesis cannot be rejected. We find that households with more secure tenure have higher conservation and lower human capital investments. Statistically significant and opposite effects on tenure security on conservation and human capital investments suggest that households may make tradeoffs between these two modes of transfer based on the security of their land tenure. Households with better tenure secure may be choosing increased soil conservation over human capital investment as a means of wealth transfer to the next generation.
