TY - JOUR

T1 - Contracts for afforestation and the role of monitoring for landowners' willingness to accept

AU - Vedel, Suzanne Elizabeth

AU - Jacobsen, Jette Bredahl

AU - Thorsen, Bo Jellesmark

PY - 2015

Y1 - 2015

N2 - The proper balance between costly monitoring and non-compliance have often been studied, however, the costs of monitoring from landowners’ perspective have only received little attention. We designed a Choice Experiment where landowners expressed their willingness to accept afforestation contracts with varying attributes, one of them being the likelihood of being monitored. Based on agency and social preference theory, respectively, we formulated a model allowing us to test alternative hypotheses regarding landowners’ behaviour. The first hypothesis was that landowners may plan not to comply if optimal, which makes monitoring increasingly unwelcome as the contract sum increases. The second hypothesis was that landowners plan to comply and consider monitoring increasingly fair as the contract sum increases. The hypotheses were tested using a discrete mixture RPL model, where three parameters were estimated for an interaction effect between monitoring probability and contract sum (one fixed to zero and two varied freely). Both free parameters were positive and significant, indicating that landowners tend to find monitoring less of a negative feature, the higher the contract sum – suggesting that a group of landowners show social preferences. A latent class model further corroborated that conclusion.

AB - The proper balance between costly monitoring and non-compliance have often been studied, however, the costs of monitoring from landowners’ perspective have only received little attention. We designed a Choice Experiment where landowners expressed their willingness to accept afforestation contracts with varying attributes, one of them being the likelihood of being monitored. Based on agency and social preference theory, respectively, we formulated a model allowing us to test alternative hypotheses regarding landowners’ behaviour. The first hypothesis was that landowners may plan not to comply if optimal, which makes monitoring increasingly unwelcome as the contract sum increases. The second hypothesis was that landowners plan to comply and consider monitoring increasingly fair as the contract sum increases. The hypotheses were tested using a discrete mixture RPL model, where three parameters were estimated for an interaction effect between monitoring probability and contract sum (one fixed to zero and two varied freely). Both free parameters were positive and significant, indicating that landowners tend to find monitoring less of a negative feature, the higher the contract sum – suggesting that a group of landowners show social preferences. A latent class model further corroborated that conclusion.

KW - Agri-environmental schemes

KW - Choice Experiment

KW - Moral hazard

KW - Payment for environmental services (PES)

KW - Forest

KW - Social preferences

U2 - 10.1016/j.forpol.2014.11.007

DO - 10.1016/j.forpol.2014.11.007

M3 - Journal article

VL - 51

SP - 29

EP - 37

JO - Forest Policy and Economics

JF - Forest Policy and Economics

SN - 1389-9341

ER -