Non-monetary factors as moderators of motivation crowding in incentive-based environmental management: An experimental approach

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Title: Non-monetary factors as moderators of motivation crowding in incentive-based environmental management: An experimental approach
Authors: Bernal-Escobar, Adriana
Thesis advisor: Prof. Dr. Stefanie Engel
Thesis referee: Prof. Dr. Juan Camilo Cardenas
Abstract: Environmental degradation is threatening the provision of ecosystem services (IPBES, 2019). In an attempt to reverse this degradation trend, the use of economic incentives has increasingly gained prominence in environmental policy. In particular, payments for ecosystem services (PES), a type of economic incentive in which ecosystem services providers voluntarily receive a payment in exchange for the provision of ecosystem services, has increasingly gained relevance worldwide (Salzman et al., 2018). PES aim to enhance environmental conservation by altering the economic costs or benefits associated with targeted pro-environmental actions. However, a large amount of empirical evidence shows that PES, like other economic incentives, could potentially crowd out (or crowd in) intrinsic motivations for environmental conservation, which may sometimes translate into unexpected undesirable overall effects (for reviews, see Bowles and Polania-Reyes, 2012; Rode et al., 2015). Up to date, the conditions under which PES, and economic incentives in general, induce such motivational crowding effects are still not fully understood. In analyzing these effects, economic theory has often taken for granted non-monetary factors of economic incentives because they do not involve changes in prices or incomes. However, experimental evidence show that such factors could be relevant to preventing crowding-out effects or even creating crowding-in effects (e.g., see Ariely et al., 2009; Heyman and Ariely, 2004). In the context of PES, a large proportion of the experimental literature has focused on studying the effect of design features related to the monetary elements of these programs (e.g., Kerr et al., 2012; Kolinjivadi et al., 2019; Midler et al., 2015; Moros et al., 2019; Narloch et al., 2012), while fewer experimental studies have focused on non-monetary factors such as the degree of participation in the design or implementation process (e.g., Jack, 2009; Moros et al., 2019; Vollan, 2008). The present thesis contributes to this line of literature by examining whether PES could be more or less effective when specific non-monetary factors are adjusted in PES design or implementation. This thesis comprises an introductory chapter (Chapter 1) and a concluding chapter (Chapter 5) that serve as an overview of the thesis, together with three research articles (Chapters 2, 3 and 4). In each of the research articles belonging to this thesis, a specific non-monetary factor in the design or implementation context of PES is analyzed. Prior versions of the research articles in chapters 2-4 have been published as working papers on SSRN. Their content is briefly summarized below. Chapter 2 is entitled “Beyond a Market Discourse: Is Framing a Solution to Avoid Motivational Crowding-Out in Payments for Ecosystem Services?” and is co-authored by S. Engel and E. Midler. The goal of this article is to examine the role of the framing of a PES policy in preventing motivational crowding effects. In particular, it focusses on the short- and long-term effects of two dimensions of framing on: 1) using different terms to denote the payment, and 2) emphasizing different types of ecosystem services obtained from nature to motivate its conservation. This article analyses this topic with a lab-in-the-field experiment conducted with 157 farmers from a Colombian municipality. The findings of this article suggest that the framing of a policy could be a rather inexpensive tool to mitigate motivational crowding effects. In particular, a framing that acknowledges forest conservation as an achievement and a framing that emphasizes the cultural ecosystem services obtained from forest results in better conservation outcomes relative to a control framing. Chapter 3 is entitled “Who is Benefiting Downstream? Experimental Evidence on the Relevance of Upstream-Downstream Geographic Distance for Water Provision.” and is co-authored by S. Engel, E. Midler and T. Vorlaufer. The goal of this article is to study the relevance of the social distance between ecosystem service providers and beneficiaries for the short- and long-term motivational crowding effects of a PES policy. This article analyses this topic with a lab-in-the-field experiment in which the salience of social identity is defined by the real geographical distance between ecosystem service providers and beneficiaries, rather than being artificially induced. In particular, the experiment involves 60 rural farmers from a Colombian municipality, whose water provision decisions affected passive downstream beneficiaries in either the same municipality or the capital city of Bogotá. The findings suggest that although sharing a closer place identity with downstream beneficiaries is relevant to determine baseline water provision, it does not affect average motivational crowding effects in the short and long term. Nonetheless, predictions from the econometric analysis of the heterogeneous treatment effects suggest that emphasizing the benefits provided to people with whom upstream providers feel more socially identified could mitigate long-term crowding-out effects on providers with weak levels of place identification, without compromising the short-term effectiveness on farmers with a strong place identity and already high provisioning levels. Therefore, in the absence of a well-defined group of downstream beneficiaries financing a PES program, it could be more effective to emphasize local benefits, rather than the general benefits to society. Chapter 4 is entitled “Behavioral Spillovers from Mixing Conservation Policies in Neighboring Areas: An Experimental Analysis on Fairness Perceptions toward Unequal Policies.” and is co-authored by S. Engel and E. Midler. The goal of this article is to analyze the impact of fairness concerns on the effectiveness of a policy that is implemented in an unequal institutional context. In particular, it compares the effectiveness of implementing a specific economic incentive when a monetary reward is being implemented in a neighboring area, to the effectiveness of implementing the same economic incentive over the entire area. This article analyses this topic with a lab-in-the-field experiment conducted with 276 farmers from a Colombian municipality. In particular, the treatment recreated three institutional contexts: 1) a high priority area where PES are implemented next to a low priority area that is excluded from PES, 2) a protected area with land-use restrictions surrounded by a buffer area where PES are implemented, and 3) a protected area where PES are implemented on top of land-use restrictions, surrounded by a buffer area with only PES. Surprisingly, the findings show that fairness concerns do not increase with the level of inequality between neighbors. Although PES exclusion and simultaneously implementing PES inside and outside a protected area tend to increase fairness concerns and reduce forest conservation relative to the control groups, implementing PES only in the buffer area of a protected area decreases fairness concerns and increases forest conservation by those within the protected area, even after the policies are removed. Overall, this article stresses the relevance of considering the institutional context and context-specific fairness perceptions as a relevant factor when defining the targeting criteria for the implementation of environmental policies.
Subject Keywords: Payments for Ecosystem Services; Motivation crowding; Framing; Social identity; Unequal policies
Issue Date: 7-Oct-2022
License name: Attribution 3.0 Germany
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Type of publication: Dissertation oder Habilitation [doctoralThesis]
Appears in Collections:FB06 - E-Dissertationen

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