Compensation and Rewards for Environmental Services 1 (CRES) and efficient design of contracts in developing countries: behavioral insights from a natural field experiment

Sophie Clot, Fano Andriamahefazafy, Gilles Grolleau (), Lisette Ibanez and Philippe Méral ()
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Sophie Clot: LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier
Fano Andriamahefazafy: Université d'Antananarivo
Philippe Méral: GRED - Gouvernance, Risque, Environnement, Développement - UPVM - Université Paul-Valéry - Montpellier 3 - IRD [Occitanie] - Institut de Recherche pour le Développement - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier

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Abstract: The use of economic incentives for biodiversity (mostly Compensation and Reward for Environmental Services including Payment for ES) has been widely supported in the past decades and became the main innovative policy tools for biodiversity conservation worldwide. These policy tools are often based on the insight that rational actors perfectly weigh the costs and benefits of adopting certain behaviors and well-crafted economic incentives and disincentives will lead to socially desirable development scenarios. This rationalist mode of thought has provided interesting insights and results, but it also misestimates the context by which ‘real individuals' come to decisions, and the multitude of factors influencing development sequences. In this study, our goal is to examine how these policies can take advantage of some unintended behavioral reactions that might in return impact, either positively or negatively, general policy performances. We test the effect of income's origin (‘Low effort' based money vs. ‘High effort' based money) on spending decisions (Necessity vs. Superior goods) and subsequent pro social preferences (Future pro-environmental behavior) within Madagascar rural areas, using a natural field experiment. Our results show that money obtained under low effort leads to different consumption patterns than money obtained under high efforts: superior goods are more salient in the case of low effort money. In parallel, money obtained under low effort leads to subsequent higher pro social behavior. Compensation and rewards policies for ecosystem services may mobilize knowledge on behavioral biases to improve their design and foster positive spillovers on their development goals.

Keywords: compensation and rewards for ecosystem services; mental accounting; natural field experiment; self-licensing; behavioral economics; damages and indemnity; rural area; environmental control; incitation monétaire; économie comportementale; service écosystémique; dommage et intérêt; récompense; madagascar; zone rurale; protection de l'environnement (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

Published in Ecological Economics, 2015, 113, pp.85-96. ⟨10.1016/j.ecolecon.2015.02.021⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01506387

DOI: 10.1016/j.ecolecon.2015.02.021

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