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Incentivizing Cooperative Agreements for Sustainable Forest Management: Experimental Tests of Alternative Structures and Institutional Rules

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  • David McEvoy
  • Michael Jones
  • Michael McKee
  • John Talberth

Abstract

Non-industrial private forestland owners (NIPFs) manage the majority of US forestland. But land use conversion is highest amongst this group, in part due to the relative paucity of income earned from active forest management relative to sale of land to developers. Cooperative forest management agreements can help reduce this differential, but participation remains low. If structured well, these agreements can provide opportunities for long term payments from sales of timber and ecosystem services at levels sufficient to reduce the temptation to convert. In this paper we investigate various means of encouraging meaningful participation in cooperative agreements for forests that emphasize conservation. We report on the results obtained through a series of laboratory market experiments in which the participants play the role of NIPFs and make resource allocation decisions facing real financial incentives. Our results shed light on the relative factors that affect the success of these agreements. In particular, we find that when agreements include contribution thresholds (with money back guarantees) coupled with relatively long contract lengths, groups are able to preserve a significant fraction of forested lands through conservation agreements. Key Words: conservation agreement, participation, economic laboratory experiment

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File URL: http://econ.appstate.edu/RePEc/pdf/wp1323.pdf
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Paper provided by Department of Economics, Appalachian State University in its series Working Papers with number 13-23.

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Date of creation: 2013
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Handle: RePEc:apl:wpaper:13-23

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Fax: 828-262-6105
Web page: http://www.business.appstate.edu/departments/economics/
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  1. Smith, Rodney B. W. & Shogren, Jason F., 2002. "Voluntary Incentive Design for Endangered Species Protection," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 169-187, March.
  2. David M. McEvoy, 2009. "Not It: Opting out of Voluntary Coalitions that Provide a Public Good," Working Papers 09-14, Department of Economics, Appalachian State University.
  3. Raunikar, Ronald & Buongiorno, Joseph, 2006. "Willingness to pay for forest amenities: The case of non-industrial owners in the south central United States," Ecological Economics, Elsevier, vol. 56(1), pages 132-143, January.
  4. David M. McEvoy & James J. Murphy & John M. Spraggon & John K. Stranlund, 2011. "The problem of maintaining compliance within stable coalitions: experimental evidence," Oxford Economic Papers, Oxford University Press, vol. 63(3), pages 475-498, July.
  5. Goldman, Rebecca L. & Thompson, Barton H. & Daily, Gretchen C., 2007. "Institutional incentives for managing the landscape: Inducing cooperation for the production of ecosystem services," Ecological Economics, Elsevier, vol. 64(2), pages 333-343, December.
  6. Warziniack, Travis & Shogren, Jason F. & Parkhurst, Gregory, 2007. "Creating contiguous forest habitat: An experimental examination on incentives and communication," Journal of Forest Economics, Elsevier, vol. 13(2-3), pages 191-207, August.
  7. John Talberth & Robert P. Berrens & Michael Mckee & Michael Jones, 2006. "Averting And Insurance Decisions In The Wildland-Urban Interface: Implications Of Survey And Experimental Data For Wildfire Risk Reduction Policy," Contemporary Economic Policy, Western Economic Association International, vol. 24(2), pages 203-223, 04.
  8. Parkhurst, Gregory M. & Shogren, Jason F. & Bastian, Chris & Kivi, Paul & Donner, Jennifer & Smith, Rodney B. W., 2002. "Agglomeration bonus: an incentive mechanism to reunite fragmented habitat for biodiversity conservation," Ecological Economics, Elsevier, vol. 41(2), pages 305-328, May.
  9. Marks, Melanie & Croson, Rachel, 1998. "Alternative rebate rules in the provision of a threshold public good: An experimental investigation," Journal of Public Economics, Elsevier, vol. 67(2), pages 195-220, February.
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