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Potential Cost-Effectiveness of Incentive Payment Programs for the Protection of Non-Industrial Private Forests

Author

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  • Juha Siikamäki
  • David F. Layton

Abstract

This study assesses the potential cost-effectiveness of incentive payment programs relative to traditional, top-down regulatory programs for biological conservation. We develop site-level estimates of the opportunity cost and non-monetized biological benefits of protecting biodiversity hotspots in Finnish non-industrial private forests. We then use these estimates to contrast and compare the cost-effectiveness of alternative conservation programs. Our results suggest that incentive payment programs, which tacitly capitalize on landowners’ private knowledge about the opportunity costs of conservation, may be considerably more cost-effective than traditional, top-down regulatory programs.

Suggested Citation

  • Juha Siikamäki & David F. Layton, 2007. "Potential Cost-Effectiveness of Incentive Payment Programs for the Protection of Non-Industrial Private Forests," Land Economics, University of Wisconsin Press, vol. 83(4), pages 539-560.
  • Handle: RePEc:uwp:landec:v:83:y:2007:i:4:p:539-560
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    References listed on IDEAS

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    1. Lori Lynch & Sabrina J. Lovell, 2003. "Combining Spatial and Survey Data to Explain Participation in Agricultural Land reservation Programs," Land Economics, University of Wisconsin Press, vol. 79(2), pages 259-276.
    2. Siikamaki, Juha & Layton, David F., 2007. "Discrete choice survey experiments: A comparison using flexible methods," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 122-139, January.
    3. Feenberg, Daniel & Skinner, Jonathan, 1994. "The Risk and Duration of Catastrophic Health Care Expenditures," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 633-647, November.
    4. Joseph C. Cooper, 2003. "A Joint Framework for Analysis of Agri-Environmental Payment Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 976-987.
    5. Klaus Moeltner & David F. Layton, 2002. "A Censored Random Coefficients Model For Pooled Survey Data With Application To The Estimation Of Power Outage Costs," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 552-561, August.
    6. McCulloch, Robert & Rossi, Peter E., 1994. "An exact likelihood analysis of the multinomial probit model," Journal of Econometrics, Elsevier, vol. 64(1-2), pages 207-240.
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    Citations

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    Cited by:

    1. repec:eee:jeeman:v:86:y:2017:i:c:p:8-28 is not listed on IDEAS
    2. LeVert, Michael & Stevens, Thomas & Kittredge, Dave, 2009. "Willingness-to-sell conservation easements: A case study," Journal of Forest Economics, Elsevier, vol. 15(4), pages 261-275, December.
    3. Gren, Ing-Marie & Carlsson, Mattias, 2011. "Estimation of cost functions for preserving biodiversity in Swedish forests," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114596, European Association of Agricultural Economists.
    4. repec:eee:jeeman:v:83:y:2017:i:c:p:217-230 is not listed on IDEAS
    5. Gren, Ing-Marie & Carlsson, Mattias, 2012. "Revealed payments for biodiversity protection in Swedish forests," Forest Policy and Economics, Elsevier, vol. 23(C), pages 55-62.
    6. Rabotyagov, Sergey S. & Lin, Sonja, 2013. "Small forest landowner preferences for working forest conservation contract attributes: A case of Washington State, USA," Journal of Forest Economics, Elsevier, vol. 19(3), pages 307-330.
    7. Kim, Taeyoung & Langpap, Christian, 2016. "Agricultural landowners’ response to incentives for afforestation," Resource and Energy Economics, Elsevier, vol. 43(C), pages 93-111.
    8. repec:eee:ecomod:v:229:y:2012:i:c:p:16-24 is not listed on IDEAS
    9. Juutinen, Artti & Mönkkönen, Mikko & Ylisirniö, Anna-Liisa, 2009. "Does a voluntary conservation program result in a representative protected area network?: The case of Finnish privately owned forests," Ecological Economics, Elsevier, vol. 68(12), pages 2974-2984, October.
    10. Lindhjem, Henrik & Mitani, Yohei, 2012. "Forest owners’ willingness to accept compensation for voluntary conservation: A contingent valuation approach," Journal of Forest Economics, Elsevier, vol. 18(4), pages 290-302.
    11. repec:eee:foreco:v:30:y:2018:i:c:p:1-12 is not listed on IDEAS
    12. Kipperberg, Gorm & Bond, Craig A. & Hoag, Dana L., 2008. "An Application of Mixed Logit Estimation in the Analysis of Producers’ Stated Preferences," Working Papers 108719, Colorado State University, Department of Agricultural and Resource Economics.

    More about this item

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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