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

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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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    Cited by:

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    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. Zhou, Mo, 2017. "Valuing environmental amenities through inverse optimization: Theory and case study," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 217-230.
    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. Acey, Charisma & Kisiangani, Joyce & Ronoh, Patrick & Delaire, Caroline & Makena, Evelyn & Norman, Guy & Levine, David & Khush, Ranjiv & Peletz, Rachel, 2019. "Cross-subsidies for improved sanitation in low income settlements: Assessing the willingness to pay of water utility customers in Kenyan cities," World Development, Elsevier, vol. 115(C), pages 160-177.
    7. 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.
    8. Kim, Taeyoung & Langpap, Christian, 2016. "Agricultural landowners’ response to incentives for afforestation," Resource and Energy Economics, Elsevier, vol. 43(C), pages 93-111.
    9. Miljand, Matilda & Bjärstig, Therese & Eckerberg, Katarina & Primmer, Eeva & Sandström, Camilla, 2021. "Voluntary agreements to protect private forests – A realist review," Forest Policy and Economics, Elsevier, vol. 128(C).
    10. Chen, Xiaodong & Lupi, Frank & An, Li & Sheely, Ryan & Viña, Andrés & Liu, Jianguo, 2012. "Agent-based modeling of the effects of social norms on enrollment in payments for ecosystem services," Ecological Modelling, Elsevier, vol. 229(C), pages 16-24.
    11. 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.
    12. Sharma, Bijay P. & Cho, Seong-Hoon, 2021. "Analyzing how forest-based amenity values and carbon storage benefits affect spatial targeting for conservation investment," Forest Policy and Economics, Elsevier, vol. 131(C).
    13. 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.
    14. Nielsen, Anne Sofie Elberg & Jacobsen, Jette Bredahl & Strange, Niels, 2018. "Landowner participation in forest conservation programs: A revealed approach using register, spatial and contract data," Journal of Forest Economics, Elsevier, vol. 30(C), pages 1-12.
    15. 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.

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    JEL classification:

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

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