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Do Payments for Environmental Services Affect Forest Cover? A Farm-Level Evaluation from Costa Rica

  • Rodrigo A. Arriagada,
  • Paul J. Ferraro
  • Erin O. Sills
  • Subhrendu K. Pattanayak
  • Silvia Cordero-Sancho

Payments for environmental services (PES) are popular despite little empirical evidence of their effectiveness. We estimate the impact of PES on forest cover in a region known for exemplary implementation of one of the best-known and longest-lived PES programs. Our evaluation design combines sampling that incorporates prematching, data from remote sensing and household surveys, and empirical methods that include partial identification with weak assumptions, difference-in-differences matching estimators, and tests of sensitivity to unobservable heterogeneity. PES in our study site increased participating farm forest cover by about 11% to 17% of the mean area under PES contract over eight years.

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Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 88 (2012)
Issue (Month): 2 ()
Pages: 382-399

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Handle: RePEc:uwp:landec:v:88:y:2012:ii:1:p:382-399
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