Beneficial selection and the efficient procurement of ecosystem services
AbstractIt has bee suggested by many authors that adverse selection in government schemes for the procurement of ecosystem services impairs both the efficiency of these schemes and the value for money that they deliver to taxpayers and funding agencies. However, recent research considers that these types of procurement system may not be characterised by adverse selection but by what might labelled as “beneficial selection”. And this research goes on to show that even with beneficial selection there will still remain potential inefficiency arising from a continuing need for payment of information rents to the participating farmers in the scheme. This paper presents and analyses a model that represents the tradeoffs in designing efficient mechanisms for the procurement of ecosystem services. A key characteristic is the payment of informational rents to participants so as to increase overall efficiency. The impact of beneficial selection is carefully explored in this context, and we investigate implications for policy makers. In particular we suggest that some conventional policy advice in this area, that ignores the possibility of beneficial selection, may be mis-directed.
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Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 124894.
Date of creation: 12 Aug 2012
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Asymmetric Information; Beneficial Selection; Adverse Selection; Payment for Ecosystem Services; Agricultural and Food Policy; D82 Asymmetric and Private Information; Q57 Ecosystem Services;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- Asy - General Economics and Teaching - - - - -
- and - - - - - -
- Pri - Economic Systems - - - - -
- Inf - Health, Education, and Welfare - - - - -
- Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
- Eco - Macroeconomics and Monetary Economics - - - - -
- Ser - - - - - -
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