Incentivizing Cooperative Agreements for Sustainable Forest Management: Experimental Tests of Alternative Structures and Institutional Rules
Non-industrial private forestland owners (NIPFs) manage the majority of US forestland. But land use conversion is highest amongst this group, in part due to the relative paucity of income earned from active forest management relative to sale of land to developers. Cooperative forest management agreements can help reduce this differential, but participation remains low. If structured well, these agreements can provide opportunities for long term payments from sales of timber and ecosystem services at levels sufficient to reduce the temptation to convert. In this paper we investigate various means of encouraging meaningful participation in cooperative agreements for forests that emphasize conservation. We report on the results obtained through a series of laboratory market experiments in which the participants play the role of NIPFs and make resource allocation decisions facing real financial incentives. Our results shed light on the relative factors that affect the success of these agreements. In particular, we find that when agreements include contribution thresholds (with money back guarantees) coupled with relatively long contract lengths, groups are able to preserve a significant fraction of forested lands through conservation agreements. Key Words: conservation agreement, participation, economic laboratory experiment
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