Preferences for REDD+ Contract Attributes in Low-Income Countries: A Choice Experiment in Ethiopia

33 Pages Posted: 20 Apr 2016

See all articles by Sahan Dissanayake

Sahan Dissanayake

Colby College - Department of Economics

Abebe Beyene

EfD Ethiopia

Randall A. Bluffstone

Portland State University - Department of Economics

Zenebe Gebreegziabher

Mekelle University - Department of Economics

Peter Martinsson

University of Gothenburg - Department of Economics and Statistics

Alemu Mekonnen

Addis Ababa University - Department of Economics

Michael Toman

World Bank - Development Research Group (DECRG)

Ferdinand M. Vieider

University of Lyon, CNRS-GATE; German Institute for Economic Research (DIW Berlin); WZB Berlin Social Science Center

Date Written: June 9, 2015

Abstract

This paper informs the national and international policy discussions related to the adoption of the United Nations Reducing Emissions from Deforestation and Forest Degradation Programme. Effective program instruments must carefully consider incentives, opportunity costs, and community interactions. A choice experiment survey was applied to rural Ethiopian communities to understand respondents? preferences toward the institutional structure of the program contracts. The results show that respondents have particular preferences about how Reducing Emissions from Deforestation and Forest Degradation programs are structured with regard to the manner in which the payments are divided between the households and the communities, the restrictions on using grazing land, and the level of payments received for the program. Surprisingly, restrictions on firewood collection do not significantly impact contract choice. The paper further analyzes the structure of the preferences by using attribute interaction terms and socio-demographic interaction terms. The analysis finds significant regional variation in preferences, indicating that Reducing Emissions from Deforestation and Forest Degradation should be tailored to specific regions. Finally, the marginal willingness to pay for attributes is calculated using the traditional preference space approach, as well as the more recent willingness-to-pay approach.

Keywords: Climate Change and Health, Global Environment, Science of Climate Change, Climate Change and Environment

Suggested Citation

Dissanayake, Sahan and Beyene, Abebe and Bluffstone, Randall Ames and Gebreegziabher, Zenebe and Martinsson, Peter and Mekonnen, Alemu and Toman, Michael and Vieider, Ferdinand M., Preferences for REDD+ Contract Attributes in Low-Income Countries: A Choice Experiment in Ethiopia (June 9, 2015). World Bank Policy Research Working Paper No. 7296, Available at SSRN: https://ssrn.com/abstract=2616554

Sahan Dissanayake (Contact Author)

Colby College - Department of Economics ( email )

Waterville, ME 04901
United States

Abebe Beyene

EfD Ethiopia

Ethiopia

Randall Ames Bluffstone

Portland State University - Department of Economics ( email )

P.O. Box 751
Portland, OR 97207-0751
United States
503-725-3938 (Phone)
503-725-3945 (Fax)

Zenebe Gebreegziabher

Mekelle University - Department of Economics ( email )

Adi Haki Campus
Post Box No. 451
Mekelle
Ethiopia

Peter Martinsson

University of Gothenburg - Department of Economics and Statistics ( email )

Box 640
Vasagatan 1, E-building, floor 5 & 6
Göteborg, 40530
Sweden

Alemu Mekonnen

Addis Ababa University - Department of Economics

Addis Ababa
Ethiopia

Michael Toman

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street N.W.
MSN3-311
Washington, DC 20433
United States

Ferdinand M. Vieider

University of Lyon, CNRS-GATE ( email )

93, chemin des Mouilles
Ecully, 69130
France

German Institute for Economic Research (DIW Berlin)

Mohrenstraße 58
Berlin, 10117
Germany

WZB Berlin Social Science Center ( email )

Reichpietschufer 50
D-10785 Berlin, 10785
Germany

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