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Payments for Ecosystem Services: Can we kill two birds with one stone? Insights from a Natural Field Experiment in Madagascar

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  • Sophie Clot
  • Fano Andriamahefazafy
  • Gilles Grolleau
  • Lisette Ibanez
  • Philippe Méral

Abstract

The explicit assumption underlying Payments for Ecosystem Services (PES) is that offering payments that are at least equal to individual’s opportunity cost will establish individuals’ participation. At the same time, that payment should act as a substitution within landowners’ global income, making environmental conservation compatible with economic development goals, and suitable for win-win policy. This partially acts under the more general hypothesis of money fungibility built-in neoclassical economic premise. Meanwhile, behavioural economics demonstrate that individuals track their financial activities using a set of cognitive labels depending to the context in which it was obtained, each of which being associated with a different marginal propensity to consume. Based on a ‘Humans’ vs. ‘Econs’ approach, we test the effect of income’s origin (‘Low effort’ based money vs. ‘High effort’ based money) on spending decisions (Necessity vs. Superior goods) and pro social preferences (Contribution to a public good) within Madagascar rural areas that are potential beneficiaries of PES programs, using a natural field experiment. Our findings support that human’s behavioural responses matter and could, under some circumstances, alter environmental conservation policies.

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File URL: http://www.lameta.univ-montp1.fr/Documents/DR2014-01.pdf
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Bibliographic Info

Paper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 14-01.

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Length: 38 pages
Date of creation: Jan 2014
Date of revision: Jan 2014
Handle: RePEc:lam:wpaper:14-01

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  1. Roland Bénabou & Jean Tirole, 2005. "Incentives and Prosocial Behavior," NBER Working Papers 11535, National Bureau of Economic Research, Inc.
  2. Bulte, Erwin H. & Lipper, Leslie & Stringer, Randy & Zilberman, David, 2008. "Payments for ecosystem services and poverty reduction: concepts, issues, and empirical perspectives," Environment and Development Economics, Cambridge University Press, vol. 13(03), pages 245-254, June.
  3. Börner, Jan & Wunder, Sven & Wertz-Kanounnikoff, Sheila & Tito, Marcos Rügnitz & Pereira, Ligia & Nascimento, Nathalia, 2010. "Direct conservation payments in the Brazilian Amazon: Scope and equity implications," Ecological Economics, Elsevier, vol. 69(6), pages 1272-1282, April.
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  7. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," American Economic Review, American Economic Association, vol. 92(4), pages 1218-1221, September.
  8. Brañas-Garza, Pablo & Bucheli, Marisa & García-Muñoz, Teresa & Espinosa Alejos, María Paz, 2012. "Moral cleansing and moral licenses: experimental evidence," DFAEII Working Papers 2012-09, University of the Basque Country - Department of Foundations of Economic Analysis II.
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Cited by:
  1. Sophie Clot & Charlotte Stanton, 2014. "Present Bias in Payments for Ecosystem Services: Insights from a Behavioural Experiment in Uganda," Working Papers 14-03, LAMETA, Universtiy of Montpellier, revised Jan 2014.

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