Present Bias in Payments for Ecosystem Services: Insights from a Behavioural Experiment in Uganda
Farmers are necessary agents in global efforts to conserve the environment now that croplands and pastures together constitute the largest terrestrial system on Earth – covering some 48% of (ice-free) land surface. Whereas standard economic models predict that farmers will participate in conservation programs so long as they are profitable, empirical findings from behavioral economics point to a number of normally unobservable preferences that may influence the decision-making process. This study tests whether heterogeneity in behavioral preferences correlates with decisions to participate in Payments for Environmental Services (PES) programs. We elicit individual trust and time preferences using incentivized choice experiments and link resulting measures to PES enrollment and household survey data in Uganda. We find that farmers who exhibit present-biased preferences – those who show a particular desire for proximate gains – are 44.1% more likely to self-select into PES than those who show time-consistent or future-biased preferences.
|Date of creation:||Jan 2014|
|Date of revision:||Jan 2014|
|Contact details of provider:|| Postal: Avenue Raymond Dugrand, CS 79606, 34960 Montpellier Cedex 2|
Web page: http://www.lameta.univ-montp1.fr/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nava Ashraf & Iris Bohnet & Nikita Piankov, 2006. "Decomposing trust and trustworthiness," Experimental Economics, Springer;Economic Science Association, vol. 9(3), pages 193-208, September.
- Schuck, Eric C. & Nganje, William & Yantio, Debazou, 2002. "The role of land tenure and extension education in the adoption of slash and burn agriculture," Ecological Economics, Elsevier, vol. 43(1), pages 61-70, November.
- O'Donoghue, Ted & Rabin, Matthew, 1997.
"Doing It Now or Later,"
Department of Economics, Working Paper Series
qt7t44m5b0, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Ted O'Donoghue and Matthew Rabin ., 1997. "Doing It Now or Later," Economics Working Papers 97-253, University of California at Berkeley.
- Ted O'Donoghue & Matthew Rabin, 1996. "Doing It Now or Later," Discussion Papers 1172, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Dean Karlan, 2004.
"Using experimental economics to measure social capital and predict financial decisions,"
Artefactual Field Experiments
00074, The Field Experiments Website.
- Dean S. Karlan, 2005. "Using Experimental Economics to Measure Social Capital and Predict Financial Decisions," American Economic Review, American Economic Association, vol. 95(5), pages 1688-1699, December.
- Giovanopoulou, Eirini & Nastis, Stefanos A. & Papanagiotou, Evagelos, 2011. "Modeling farmer participation in agri-environmental nitrate pollution reducing schemes," Ecological Economics, Elsevier, vol. 70(11), pages 2175-2180, September.
- Johnson, Noel D. & Mislin, Alexandra A., 2011. "Trust games: A meta-analysis," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 865-889.
- Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
- Meier, Stephan & Sprenger, Charles, 2009.
"Present-Biased Preferences and Credit Card Borrowing,"
IZA Discussion Papers
4198, Institute for the Study of Labor (IZA).
- Stephan Meier & Charles Sprenger, 2010. "Present-Biased Preferences and Credit Card Borrowing," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 193-210, January.
- Kosoy, Nicolas & Martinez-Tuna, Miguel & Muradian, Roldan & Martinez-Alier, Joan, 2007. "Payments for environmental services in watersheds: Insights from a comparative study of three cases in Central America," Ecological Economics, Elsevier, vol. 61(2-3), pages 446-455, March.
- Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
- Wunder, Sven, 2008. "Payments for environmental services and the poor: concepts and preliminary evidence," Environment and Development Economics, Cambridge University Press, vol. 13(03), pages 279-297, June.
- James Andreoni & Charles Sprenger, 2010.
"Estimating Time Preferences from Convex Budgets,"
NBER Working Papers
16347, National Bureau of Economic Research, Inc.
- Guth, Werner & Ockenfels, Peter & Wendel, Markus, 1997. "Cooperation based on trust. An experimental investigation," Journal of Economic Psychology, Elsevier, vol. 18(1), pages 15-43, February.
- Rodrigo A. Arriagada, & Paul J. Ferraro & Erin O. Sills & Subhrendu K. Pattanayak & Silvia Cordero-Sancho, 2012. "Do Payments for Environmental Services Affect Forest Cover? A Farm-Level Evaluation from Costa Rica," Land Economics, University of Wisconsin Press, vol. 88(2), pages 382-399.
- Engel, Stefanie & Pagiola, Stefano & Wunder, Sven, 2008. "Designing payments for environmental services in theory and practice: An overview of the issues," Ecological Economics, Elsevier, vol. 65(4), pages 663-674, May.
- David Laibson, 1997.
"Golden Eggs and Hyperbolic Discounting,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 112(2), pages 443-478.
- Nava Ashraf & Dean Karlan & Wesley Yin, 2006. "Tying Odysseus to the Mast: Evidence From a Commitment Savings Product in the Philippines," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 635-672.
- Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
- Shan Ma & Scott M. Swinton & Frank Lupi & Christina Jolejole-Foreman, 2012. "Farmers’ Willingness to Participate in Payment-for-Environmental-Services Programmes," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(3), pages 604-626, 09.
- Sophie Clot & Fano Andriamahefazafy & Gilles Grolleau & Lisette Ibanez & Philippe Méral, 2014. "Payments for Ecosystem Services: Can we kill two birds with one stone? Insights from a Natural Field Experiment in Madagascar," Working Papers 14-01, LAMETA, Universtiy of Montpellier, revised Jan 2014.
- James Andreoni & Charles Sprenger, 2012.
"Risk Preferences Are Not Time Preferences,"
American Economic Review,
American Economic Association, vol. 102(7), pages 3357-3376, December.
- Venkatachalam, L., 2008. "Behavioral economics for environmental policy," Ecological Economics, Elsevier, vol. 67(4), pages 640-645, November.
- Muradian, Roldan & Corbera, Esteve & Pascual, Unai & Kosoy, Nicolás & May, Peter H., 2010. "Reconciling theory and practice: An alternative conceptual framework for understanding payments for environmental services," Ecological Economics, Elsevier, vol. 69(6), pages 1202-1208, April.
- Catherine C. Eckel & Philip J. Grossman, 2008. "Forecasting Risk Attitudes: An Experimental Study Using Actual and Forecast Gamble Choices," Monash Economics Working Papers archive-01, Monash University, Department of Economics.
- Tesfaye, Abonesh & Brouwer, Roy, 2012. "Testing participation constraints in contract design for sustainable soil conservation in Ethiopia," Ecological Economics, Elsevier, vol. 73(C), pages 168-178.
- Stefano Pagiola & Ana Rios & Agustin Arcenas, 2010.
"Poor Household Participation in Payments for Environmental Services: Lessons from the Silvopastoral Project in Quindío, Colombia,"
Environmental & Resource Economics,
Springer;European Association of Environmental and Resource Economists, vol. 47(3), pages 371-394, November.
- Pagiola, Stefano & Rios, Ana R. & Arcenas, Agustin, 2007. "Poor Household Participation in Payments for Environmental Services: Lessons from the Silvopastoral Project in Quindío, Colombia," MPRA Paper 4794, University Library of Munich, Germany.
- James Andreoni, 2005.
"Trust, Reciprocity, and Contract Enforcement: Experiments on Satisfaction Guaranteed,"
666156000000000679, UCLA Department of Economics.
- Andreoni,J., 2005. "Trust, reciprocity, and contract enforcement : experiments on satisfaction guaranteed," Working papers 7, Wisconsin Madison - Social Systems.
- Vatn, Arild, 2010. "An institutional analysis of payments for environmental services," Ecological Economics, Elsevier, vol. 69(6), pages 1245-1252, April.
- Zbinden, Simon & Lee, David R., 2005. "Paying for Environmental Services: An Analysis of Participation in Costa Rica's PSA Program," World Development, Elsevier, vol. 33(2), pages 255-272, February.
- Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
- Asquith, Nigel M. & Vargas, Maria Teresa & Wunder, Sven, 2008. "Selling two environmental services: In-kind payments for bird habitat and watershed protection in Los Negros, Bolivia," Ecological Economics, Elsevier, vol. 65(4), pages 675-684, May.
When requesting a correction, please mention this item's handle: RePEc:lam:wpaper:14-03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Patricia Modat)
If references are entirely missing, you can add them using this form.