Enhancing spatial coordination in payment for ecosystem services schemes with non-pecuniary preferences

Laure Kuhfuss, Raphaële Préget (), Sophie Thoyer (), Frans de Vries and Nick Hanley
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Sophie Thoyer: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier

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Abstract: he environmental benefits from Payment for Ecosystem Services (PES) schemes can often be enhanced if private land managers are induced to enrol land in a spatially coordinated manner. One incentive mechanism which has been proposed to achieve such spatial coordination is the agglomeration bonus, a two-part payment scheme which offers a pecuniary (financial) reward for decisions that lead to greater spatial coordination of enrolled land. However, farmers respond to a range of motives when deciding whether to participate in such schemes, including non-pecuniary motives such as a concern for the environment or social comparisons. This study implements a de-contextualised laboratory experiment to test the effectiveness of the agglomeration bonus when non-pecuniary motives are explicitly incorporated into the decision-making environment. We capture intrinsic preferences for the public good dimension of environmental improvement through a real donation to environmental charities and examine the relative impact of a group-ranking nudge. The experimental results show that the agglomeration bonus does indeed improve participation and spatial coordination when non-pecuniary motives are accounted for, but that its performance is not enhanced by the nudge.

Keywords: Agglomeration Bonus; Coordination Games; Environmental Preferences; Laboratory Experiments; Social Comparison; Nudge; spatial Coordination (search for similar items in EconPapers)
Date: 2022-02
New Economics Papers: this item is included in nep-agr, nep-env, nep-exp and nep-gth
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03435954v1
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Published in Ecological Economics, 2022, 192, pp.107271. ⟨10.1016/j.ecolecon.2021.107271⟩

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Journal Article: Enhancing spatial coordination in payment for ecosystem services schemes with non-pecuniary preferences (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03435954

DOI: 10.1016/j.ecolecon.2021.107271

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