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Evaluating the potential of marketable permits in a framed field experiment: Forest conservation in Nepal

Author

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  • Raja Rajendra Timilsina

    (Kochi University of Technology)

  • Koji Kotani

    (School of Economics and Management, Kochi University of Technology)

Abstract

A marketable permits system (MPS) has been deemed effective in laboratory experiments, however, little is known about how the MPS works in the field. We evaluate the MPS efficiency for forest conservation by framed field experiments in Nepal. Forestland demands are elicited from farmers, with which the experiments are carried out. The novelty lies in instituting a uniform price auction (UPA) under trader settings and in identifying the efficiency in the field of developing nations. The results suggest that farmers with limited education understand UPA rules, reveal their forestland valuations and that the MPS is effective with 80% of efficiency.

Suggested Citation

  • Raja Rajendra Timilsina & Koji Kotani, 2015. "Evaluating the potential of marketable permits in a framed field experiment: Forest conservation in Nepal," Working Papers SDES-2015-22, Kochi University of Technology, School of Economics and Management, revised Sep 2015.
    • Handle: RePEc:kch:wpaper:sdes-2015-22
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    More about this item

    Keywords

    uniform price auction; marketable permits system; framed field experiment; forest management;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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