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The transferability and performance of payment-by-results biodiversity conservation procurement auctions: empirical evidence from northernmost Germany

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Author Info
Markus Groth () (Institute of Economics, University of Lüneburg)
Abstract

Managed grasslands contribute in a number of ways to the biodiversity of European agricultural landscapes and provide a wide range of ecosystem services that are also of socio-economic value. Against the background of a rapid biodiversity loss in agricultural landscapes, increasing attention is being paid to farming practices that enhance ecosystem services. Therefore developing cost-effective conservation payment schemes is the main challenge facing present European agri-environmental policy. This paper deals with the transferability of a payment scheme that combines a payment-by-results approach with the use of discriminatory-price conservation procurement auctions in order to improve the cost-effectiveness of conservation schemes for grassland plant biodiversity. Hence the design, implementation and results of the adapted case-study payment scheme in the county Steinburg in the northernmost federal state of Germany (Schleswig-Holstein) will be focussed. Results concerning the ecological-effectiveness of the payment-by-results approach as well bid-prices and potential cost-effectiveness gains by the use of conservation procurement auctions point out that it was possible to transfer the payment scheme successfully to another region, whereby the adapted case-study even outperforms the original case-study.

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Publisher Info
Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 119.

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Length: 35 pages
Date of creation: Feb 2009
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Handle: RePEc:lue:wpaper:119

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Related research
Keywords: agri-environmental policy; discriminatory-price auction; ecological services; experimental economics; multi-unit auction; payment-by-results; plant biodiversity; rural development.;

Find related papers by JEL classification:
C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
R52 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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    Other versions:
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  10. Klemperer, P., 1999. "Auction Theory: a Guide to the Literature," Economics Papers 1999-w12, Economics Group, Nuffield College, University of Oxford.
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  11. Riley, John G & Samuelson, William F, 1981. "Optimal Auctions," American Economic Review, American Economic Association, vol. 71(3), pages 381-92, June. [Downloadable!] (restricted)
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  12. Timothy N. Cason & Lata Gangadharan, 2004. "Auction Design for Voluntary Conservation Programs," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 86(5), pages 1211-1217, December. [Downloadable!] (restricted)
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  14. Wu, JunJie & Babcock, Bruce A., 1996. "Contract Design for the Purchase of Environmental Goods from Agriculture," Staff General Research Papers 1050, Iowa State University, Department of Economics.
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  16. Kroeger, Timm & Casey, Frank, 2007. "An assessment of market-based approaches to providing ecosystem services on agricultural lands," Ecological Economics, Elsevier, vol. 64(2), pages 321-332, December. [Downloadable!] (restricted)
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