Do payments for environmental services affect forest cover? A farm-level evaluation from Costa Rica
Payments for environmental services (PES) are popular despite little empirical evidence of their effectiveness. We estimate the impact of PES on forest cover in a region known for exemplary implementation of one of the best-known and longest-lived PES programs. Our evaluation design combines sampling that incorporates prematching, data from remote sensing and household surveys, and empirical methods that include partial identification with weak assumptions, difference-in-differences matching estimators, and tests of sensitivity to unobservable heterogeneity. PES in our study site increased participating farm forest cover by about 11% to 17% of the mean area under PES contract over eight years. (JEL Q57, Q58) © 2012 by the Board of Regents of the University of Wisconsin System.
Arriagada, RA; Ferraro, PJ; Sills, EO; Pattanayak, SK; Cordero-Sancho, S
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