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Incentivizing afforestation agreements: Institutional-economic conditions and motivational drivers

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  • Brouwer, Roy
  • Lienhoop, Nele
  • Oosterhuis, Frans

Abstract

The main objective of this study is to estimate and compare farmer demand for afforestation agreements in the Netherlands and Germany under different institutional-economic contract design conditions. Farmers’ responsiveness to financial and non-financial incentives to convert part of their land into forest is examined in a discrete choice experiment. Besides landowner and contract characteristics, we test the role of motivational drivers in explaining farmers’ willingness to conclude afforestation agreements. These are expected to lower demand for financial compensation. We fix financial compensation levels in contractual agreements relatively low compared to opportunity costs, but comparable to what farmers currently receive for nature conservation measures. Although we find substantial demand for afforestation agreements in both samples, Dutch and German farmers value contract conditions differently. This has important implications for the effectiveness of varying compensation levels on scheme participation rates. Farmers are willing to trade-off financial compensation against non-financial terms and conditions. However, having a positive environmental disposition towards wildlife conservation does not necessarily result in the acceptance of lower levels of financial compensation.

Suggested Citation

  • Brouwer, Roy & Lienhoop, Nele & Oosterhuis, Frans, 2015. "Incentivizing afforestation agreements: Institutional-economic conditions and motivational drivers," Journal of Forest Economics, Elsevier, vol. 21(4), pages 205-222.
    • Handle: RePEc:eee:foreco:v:21:y:2015:i:4:p:205-222
    DOI: 10.1016/j.jfe.2015.09.003
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    Cited by:

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    2. Pan, Zehua & Brouwer, Roy & Emelko, Monica B., 2022. "Correlating forested green infrastructure to water rates and adverse water quality incidents: A spatial instrumental variable regression model," Forest Policy and Economics, Elsevier, vol. 140(C).
    3. J Blasch & B van der Kroon & P van Beukering & R Munster & S Fabiani & P Nino & S Vanino, 2022. "Farmer preferences for adopting precision farming technologies: a case study from Italy," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(1), pages 33-81.
    4. Ryan, Mary & O’Donoghue, Cathal & Hynes, Stephen, 2018. "Heterogeneous economic and behavioural drivers of the Farm afforestation decision," Journal of Forest Economics, Elsevier, vol. 33(C), pages 63-74.
    5. Sagebiel, Julian & Glenk, Klaus & Meyerhoff, Jürgen, 2017. "Spatially explicit demand for afforestation," Forest Policy and Economics, Elsevier, vol. 78(C), pages 190-199.
    6. Miljand, Matilda & Bjärstig, Therese & Eckerberg, Katarina & Primmer, Eeva & Sandström, Camilla, 2021. "Voluntary agreements to protect private forests – A realist review," Forest Policy and Economics, Elsevier, vol. 128(C).

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    More about this item

    Keywords

    Contract design; Afforestation; Choice experiment; Willingness to accept compensation; Motivation;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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