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Private Information and the Allocation of Land Use Subsidies in Malawi

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  • B. Kelsey Jack

Abstract

Efficient targeting of public programs is difficult when the cost or benefit to potential recipients is private information. This study illustrates the potential of self-selection to improve allocational outcomes in the context of a program that subsidizes tree planting in Malawi. Landholders who received a tree planting contract as a result of bidding in an auction kept significantly more trees alive over a three year period than did landholders who received the contract through a lottery. The gains from targeting on private information through the auction represent a 30 percent cost savings per surviving tree for the implementing organization.

Suggested Citation

  • B. Kelsey Jack, 2013. "Private Information and the Allocation of Land Use Subsidies in Malawi," American Economic Journal: Applied Economics, American Economic Association, vol. 5(3), pages 113-135, July.
  • Handle: RePEc:aea:aejapp:v:5:y:2013:i:3:p:113-35
    Note: DOI: 10.1257/app.5.3.113
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    References listed on IDEAS

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    Cited by:

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    2. James Berry & Greg Fischer & Raymond Guiteras, 2020. "Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana," Journal of Political Economy, University of Chicago Press, vol. 128(4), pages 1436-1473.
    3. Bento, Antonio & Ho, Benjamin & Ramirez-Basora, Mario, 2015. "Optimal monitoring and offset prices in voluntary emissions markets," Resource and Energy Economics, Elsevier, vol. 41(C), pages 202-223.
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    5. Kitessa, R.J., 2018. "On the design and implementation of environmental conservation mechanisms : Evidence from field experiments," Other publications TiSEM cda8497d-6dcf-4092-b815-1, Tilburg University, School of Economics and Management.
    6. Rudolf, Katrin & Romero, Miriam & Asnawi, Rosyani & Irawan, Bambang & Wollni, Meike, 2020. "Effects of information and seedling provision on tree planting and survival in smallholder oil palm plantations," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    7. Campanhão, Ligia Maria Barrios & Ranieri, Victor Eduardo Lima, 2019. "Guideline framework for effective targeting of payments for watershed services," Forest Policy and Economics, Elsevier, vol. 104(C), pages 93-109.
    8. Holzer, Jorge & DePiper, Geret & Lipton, Douglas, 2017. "Buybacks with costly participation," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 130-145.
    9. Alix-Garcia, Jennifer M. & Sims, Katharine R.E. & Phaneuf, Daniel J., 2019. "Using referenda to improve targeting and decrease costs of conditional cash transfers," Journal of Public Economics, Elsevier, vol. 176(C), pages 179-194.
    10. Skidmore, Samuel & Santos, Paulo & Leimona, Beria, 2014. "Targeting REDD+: An Empirical Analysis of Carbon Sequestration in Indonesia," World Development, Elsevier, vol. 64(C), pages 781-790.
    11. Liu, Zhaoyang & Kontoleon, Andreas, 2018. "Meta-Analysis of Livelihood Impacts of Payments for Environmental Services Programmes in Developing Countries," Ecological Economics, Elsevier, vol. 149(C), pages 48-61.
    12. Andeltová, Lucie & Catacutan, Delia C. & Wünscher, Tobias & Holm-Müller, Karin, 2019. "Gender aspects in action- and outcome-based payments for ecosystem services—A tree planting field trial in Kenya," Ecosystem Services, Elsevier, vol. 35(C), pages 13-22.
    13. Romero, Miriam & Wollni, Meike & Rudolf, Katrin & Asnawi, Rosyani & Irawan, Bambang, 2019. "Promoting sustainable land use choices in Indonesia: Experimental evidence on the role of changing mindsets and structural barriers," EFForTS Discussion Paper Series 25, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    14. Zhaoyang Liu & Jintao Xu & Xiaojun Yang & Qin Tu & Nick Hanley & Andreas Kontoleon, 2019. "Performance of Agglomeration Bonuses in Conservation Auctions: Lessons from a Framed Field Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 843-869, July.
    15. Romero, Miriam & Wollni, Meike & Rudolf, Katrin & Asnawi, Rosyani & Irawan, Bambang, 2019. "Promoting biodiversity enrichment in smallholder oil palm monocultures – Experimental evidence from Indonesia," World Development, Elsevier, vol. 124(C), pages 1-1.
    16. Samuel D. Bell & Nadia A. Streletskaya, 2019. "The Random Quantity Mechanism: Laboratory and Field Tests of a Novel Cost-Revealing Procurement Mechanism," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 899-921, July.
    17. Alix-Garcia, Jennifer & Wolff, Hendrik, 2014. "Payment for Ecosystem Services from Forests," IZA Discussion Papers 8179, Institute of Labor Economics (IZA).
    18. Paulina Oliva & B. Kelsey Jack & Samuel Bell & Elizabeth Mettetal & Christopher Severen, 2020. "Technology Adoption under Uncertainty: Take-Up and Subsequent Investment in Zambia," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 617-632, July.
    19. Luc Behaghel & Karen Macours & Julie Subervie, 2018. "Can RCTs help improve the design of CAP," Working Papers hal-01974425, HAL.
    20. Lundberg, Liv & Persson, U. Martin & Alpizar, Francisco & Lindgren, Kristian, 2018. "Context Matters: Exploring the Cost-effectiveness of Fixed Payments and Procurement Auctions for PES," Ecological Economics, Elsevier, vol. 146(C), pages 347-358.
    21. Michael Greenstone & B. Kelsey Jack, 2013. "Envirodevonomics: A Research Agenda for a Young Field," NBER Working Papers 19426, National Bureau of Economic Research, Inc.
    22. Shapiro, Jeremy, 2019. "The impact of recipient choice on aid effectiveness," World Development, Elsevier, vol. 116(C), pages 137-149.
    23. Shanjun Li, 2018. "Better Lucky Than Rich? Welfare Analysis of Automobile Licence Allocations in Beijing and Shanghai," Review of Economic Studies, Oxford University Press, vol. 85(4), pages 2389-2428.

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    More about this item

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • 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

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    1. Private Information and the Allocation of Land Use Subsidies in Malawi (American Economic Journal: Applied Economics 2013) in ReplicationWiki

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