session 3.6 forest conservation policy and motivational crowding

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  • 1.Forest conservation policy & motivational crowding: Experimental evidence from Tanzania David Kaczan, Brent Swallow and W.L. (Vic) Adamowicz, University of Alberta, Canada

2. East Usambara: Multiple Ecosystem Services from a multi-use landscape 3. East Usambara: Biodiversity Under Threat Reyes et al. (2007) 60% of forest cover lost in East Usambaras 26% of remaining forest has cardamom 4. Payments for Environmental Services and Motivational Crowding Financial payments have potential to incent farmers to maintain or adopt land uses consistent with environmental services (water quality, biodiversity conservation and carbon storage) Psychology has clarified two distinct motivations for behavior: extrinsic (reward or penalty) or intrinsic (enjoyment, interest or duty) (Frey and Jengen, 2001). (Israeli Day Care example) Concerns that financial payments may crowd out intrinsic motivations and that crowding out may persist after payments stop (eg Farley and Constanza, 2010) 5. Research Methods Field experiments move experimental economics from lab to field (Cardenas, Jack) Field experiment with 250 men and women farmers from two villages in the East Usambaras Modified dictator game to examine persistent motivational crowding of PES payments $10 endowment $2 transfer 6. Experimental design: dictator game 30 Tsh 50 Tsh 20 Tsh 40 Tsh 50 Tsh 20 Tsh Donated to passive group Treatment 1, 2: Receive compensation Treatment 3, 4: Regulation requires certain amount be donated 7. PES simulations , with private and collective compensation and high and low penalties 8. Results of Games (Difference in Differences Model differences in generosity between pre-policy, policy and post policy, between policy treatments.) Standard Dictator Game: average donation 37% without payment or enforcement Private PES: average donation of 42%, about equal to reward, suggesting PES substituted for intrinsic motivation (crowding out) No evidence of persistent crowding out, when payments stopped, donations returned to average of 33% Collective PES: no effect of PES on donations during the policy period Regulation prompted an increase in payments greater than economically rational, (55% for high enforcement, 45% for low enforcement) implying a motivation to follow rules beyond expected $ value of fines themselves. 9. Differences in Crowding Behavior (Latent Class Model exploring systematic differences in responses to extrinisic incentives) Class 1 (62% of sample) exhibited motivational crowding in after being financially rewarded for donations, this group had post- policy donations 21% higher than pre-policy donations. Class 1 participants had smaller land sizes, were likely to be male and were likely to be born in the village. Class 2 (38% of sample) exhibited motivational crowding out after being financially rewarded for donations, this group had post- policy donations 6% lower than pre-policy donations. 10. a No evidence for persistent crowding out for rewards. Evidence for persistnt crowding in for enforcements. Fact of enforcement may be more important than its magnitude. Collective payment unsuccessful. Strong heterogeneity of preferences: some people crowded out, others crowded in (LCM) In summary . . . Acknowledgements: Funding AAEA, ICRAF, U of Alberta Advice -- Heini Vihimalki, Salla Rantala, and Rene Bullock Field assistance -- F. Njilima, V. Mkongewa, Y. Mwaikio, A. Kajiru, J. Mzalia, Mr. Yambazi;

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