EFD Discussion Paper Series 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008
A Diagnostic Tool for Estimating the Incidence of Subsidies Delivered by Water Utilities in Low- and Medium-Income Countries, with Illustrative Calculations
It is conventional wisdom that poor households use less water than rich households, and intuition suggests that an increasing block tariff with a lifeline block will target subsidies to poor households. In this paper, we provide a simple diagnostic tool that a water utility can use to estimate the distribution of subsidies to households in different income quintiles and to check whether this intuition about the incidence of subsidies is correct in a specific local service area. The results of our illustrative calculations show that subsidies delivered through the most common tariff structures are very poorly targeted to poor households. This finding holds regardless of the specific characteristics of the tariff structure used to calculate households’ water bills. We also find that the higher the correlation between household income and water use, the lower the proportion of total subsidies received by poor households.
Profitability of Biofuels Production: The Case of Ethiopia
This research investigates the profitability of biofuels production in Africa, taking Ethiopia as a case in point, and suggests an oil price threshold beyond which biofuel may be profitable. Specifically, the study analyzes the viability of bioethanol from molasses and biodiesel from other feedstock in the context of Ethiopia, using data from a biofuels investment survey by EEPFE/EDRI in 2010, and makes estimates based on field visits. We draw on investment theory as our underlying conceptual framework and we employ unit cost analysis for our empirical analysis. Findings reveal that, while bioethanol production (from molasses) in Ethiopia can be quite viable, the viability and competitiveness of biodiesel production will largely depend on the cost and price of feedstock. In particular, if the world oil price is expected to vary between $US42 and $US200 per barrel, biodiesel firms in Ethiopia must be able to produce at less than $US1 per liter. This suggests that viable alternatives of coproduction through value addition from byproduct seedcake and intercropping options need to be considered to enhance profitability of biodiesel production. Moreover, research and development efforts and knowledge support to the biofuels industry, including a search for better adaptive and better yielding varieties and good oil quality biofuels crops, as well as better regulatory framework and follow-up, are necessary. Overall, the biofuels industry can be viewed as a way out of poverty but a lot remains to be done to enhance its viability. This is a case study involving a few observations because of the small size of the universe of producers studied; hence, further analysis is called for as the sector expands.
The Economic Impact of Weather Variability on China’s Rice Sector
This paper provides the first county-level analysis of the impacts of weather variability on rice yield in China, by compiling a unique panel on irrigated single-season rice and daily weather data. We found that temperature and solar radiation had statistically significant impacts on rice yield during the vegetative and ripening stages, while the effects of rainfall on yield were not significant. In contrast to nearly all previous studies focusing on rice production in tropical/subtropical regions, we discovered that higher daily minimum temperature during the vegetative stage increased rice yield in China. Consistent with other studies, higher daily maximum temperature during the vegetative and ripening stages reduced rice yield in China, while the impacts of solar radiation on rice yield varied across the plant’s growth stages. Adaptation of rice production to higher temperatures effectively reduced the adverse impacts of weather variability on rice yield. Combined, our results indicate that weather variability caused a net economic loss of $25.2 million to $60.7 million to China’s rice sector in the past decade, depending on model specifications and econometric estimation strategies.
Resistance to the Regulation of Common Resources in Rural Tunisia
We examine the effect of the introduction of uniform water-charging for aquifer management and provide evidence using a survey-based choice experiment of agricultural water users in rural Tunisia. Theoretically, we show that the implementation of the proposed second-best regulation would result both in efficiency gains and in distributional effects in favour of small landholders. Empirically, we find that resistance to the introduction of an effective water-charging regime is greatest amongst the largest landholders. Resistance to the regulation of common resources may be rooted in the manner in which heterogeneity might determine the distributional impact of different management regimes.
Natural Resource Collection and Children’s Literacy: Empirical Evidence from Panel Data in Rural Ethiopia
Few studies have examined the dynamic aspect of the effect of natural resource collection on child education. This paper looks into the effect of resource collection on child education using panel data collected in four rounds from rural Ethiopia. We model resource work participation and child literacy as a joint decision. Mundlak’s approach is employed in order to exploit the panel nature of the data. Unlike other related studies, we separately analyzed the effect of collection of water and fuel on child education. We find that, in general, natural resource scarcity, in addition to its direct impact on households, negatively contributes to child education by increasing the work burden on children in rural Ethiopia. In particular, children’s participation in fetching water is found to be one of the most important factors that reduce children’s ability to read and write. In addition to the effect of resource collection on children’s literacy, this study also examined the role of other factors, such as household characteristics, child characteristics and access to schools. The policy implications of the findings are also presented.
Child Labor, the Wealth Paradox, and Common Forest Management in Bolivia
That wealthier developing country households may rely more heavily on child labor than poorer households has come to be known as the “wealth paradox.” This paper tests for a wealth paradox with regard to common natural resource wealth by analyzing the relationship between child labor and improved common property forest management (CPFM) in Bolivia. Data are analyzed using several econometric methods and it is found that households experiencing more effective CPFM generally use more forest-based and total child labor. The analysis also confirms others’ findings of a private wealth paradox with regard to private land and extends the analysis to evaluate the effect of ownership of animals.
On the Impact of Weather Variability and Climate Change on Agriculture: Evidence from Ethiopia
Weather fluctuations tend to be as important as climate change in farmers’ decision making in countries such as Ethiopia that have virtually no weather insurance. This paper assesses the distinct impacts of weather and climate change measures on agricultural productivity of households, measured in terms of crop revenue, in the Amhara region of Ethiopia. Four waves of survey data, which included about 1500 households in each round, combined with interpolated daily temperature and monthly rainfall data from the meteorological stations, are employed in the analysis. The distinction between weather and climate is highlighted by observations in the temperature data, which show that the pattern of temperature for both short-term and long-term values follows a bell-shaped distribution, with the striking feature that the extreme ends of the distribution have fatter tails for the long term values. The analysis employs monthly rainfall and 14 temperature categories related to weather measures and four categories corresponding with the extreme ends of the long-term temperature distribution. The analysis also distinguishes between summer and spring seasons and different crops, in recognition that Ethiopia’s agriculture is multi-cropping and multi-season. The major findings show that temperature effects are distinctly non-linear, but only when the weather measures are combined with the extreme ends of the distribution of the climate measures. In addition, rainfall generally has a less important role to play than temperature, contrary to expectations for rainfed agriculture.
Effects of Protected Areas on Forest Cover Change and Local Communities: Evidence from the Peruvian Amazon
Juan José Miranda, Leonardo Corral, Allen Blackman, Gregory Asner, and Eirivelthon Lima
Protected areas are a cornerstone of forest conservation in developing countries. Yet we know little about their effects on forest cover change or the socioeconomic status of local communities, and even less about the relationship between these effects. This paper assesses whether “win-win” scenarios are possible—that is, whether protected areas can both stem forest cover change and alleviate poverty. We examine protected areas in the Peruvian Amazon using high-resolution satellite images and household-level survey data for the early 2000s. To control for protected areas’ nonrandom siting, we rely on quasi-experimental (matching) methods. We find that the average protected area reduces forest cover change. We do not find a robust negative effect on local communities. Protected areas that allow sustainable extractive activities are more effective in reducing forest cover change but less effective in delivering win-win outcomes.
Local Effects of Payments for Environmental Services on Poverty
Juan Robalino, Catalina Sandoval, Laura Villalobos, and Francisco Alpízar
We estimate local effects of Payment for Environmental Services (PES) programs on poverty in Costa Rica between 2007 and 2009. Using household surveys and spatial geographic data, we are able to control for socioeconomic and geographic characteristics at the individual and census tract level. We find that the effects are insignificant at a national level. However, this reflects countervailing forces. We find that PES coverage increases poverty in low-slope places and decreases poverty in high-slope places. These results are robust to demographic characteristics of the individuals. However, the magnitudes of the impacts are very low, even when they are statistically significant. We conclude that the PES program has not increased or decreased poverty substantially in Costa Rica. Policymakers could increase the impact on poverty by focusing their efforts in low-slope areas; however, as others have shown, such a focus could also reduce the impact on avoided deforestation.
Payment Types and Participation in Payment for Ecosystem Services Programs: States Preferences of Landowners
Because the effectiveness of payment for ecosystem services (PES) programs depends on landowners’ engagement, understanding the relationship between the type of payment and participation is a key issue. This paper reports on a choice experiment that quantifies landowners’ preferences for cash and educational in-kind payment. The main results indicate a positive correlation between participation in a PES contract and the magnitude of the cash payment, while participation seems uncorrelated with the magnitude of the educational in-kind payment. In addition, we investigate the mix of payment types and heterogeneity in preferences, which can help policymakers design strategies to increase participation.
Do Entrance Fees Crowd Out Donations for Public Goods? Evidence from a Protected Area in Costa Rica
Francisco Alpízar, Peter Martinsson, and Anna Nordén
RFF Discussion Paper EfD DP 14-10 | May 2014
In this paper, we investigate how different levels of entrance fees affect donations for a public good, a natural park. To explore this issue, we conducted a stated preference study focusing on visitors’ preferences for donating money to raise funds for a protected area in Costa Rica given different entrance fee levels. The results reveal that there is incomplete crowding-out of donations when establishing an entrance fee.
Does Forest Certification in Developing Countries Have Environmental Benefits? Insights from Mexican Corrective Action Requests
Allen Blackman, Alicia Raimondi, and Frederick Cubbage
RFF Discussion Paper EfD DP 14-09 | April 2014
Certification is intended to improve management of and environmental outcomes in developing country forests. Yet we know little about whether and how it actually generates such benefits. To address that question, we analyze 1,162 corrective action requests (CARs) issued after third-party inspections of a diverse set of 35 forests in Mexico certified by the Forest Stewardship Council (FSC). CARs detail the changes in procedures and on-the-ground conditions that forest managers must make to either obtain or retain certification. Our analysis indicates that a relatively small proportion of CARs required major changes in on-the-ground environmental conditions. The majority focused on social and legal issues, and the vast majority called for only minor procedural changes. In general, forest managers complied with CARs expeditiously, and the number of CARs they received declined over time. We hypothesize that these findings were at least partly driven by the tendency of FSC certification to attract already-sustainably managed forests and by the governance challenges of community forestry in developing countries. One implication is that policymakers using FSC certification to generate environmental benefits may want to target forests with less-than-stellar management—particularly in the case of reduced emissions from deforestation and degradation (REDD) initiatives that emphasize improvement beyond business-as-usual—and to build the community and legal institutions needed for sustainable forestry.
Impacts of Climate Change on Agriculture: Evidence from China
Shuai Chen, Xiaoguang Chen, and Jintao Xu
RFF Discussion Paper EfD DP 14-07 | March 2014
We estimate the link between corn and soybean yields and weather in China, while controlling for other variables that could affect crop yields, such as socioeconomic and climate adaptation variables. We find that: (i) there are nonlinear and asymmetric relationships between corn and soybean yields and weather variables; (ii) expansion of corn and soybean production to land types not previously used for these two crops had detrimental effects on average yields for both crops; (iii) climate change led to a net economic loss of about $200 million to China’s corn and soybean sectors in the past decade; (iv) corn and soybean yields are projected to decline by 4-14% and 8-21% by 2100.
Auction Mechanisms for Allocating Subsidies for Carbon Emissions Reduction: An Experimental Investigation
Haoran He and Yefeng Chen
RFF Discussion Paper EfD DP 14-06 | March 2014
One method to reduce greenhouse gas emissions is to subsidize emissions-reducing activities. The question is how to allocate such subsidies. Allocation through auctions is an emerging mechanism. In a controlled experimental market setting, we compare the effects of a variety of auction mechanisms for allocating subsidies for carbon emissions reduction in China. Besides the conventional auction mechanisms, we place particular focus on testing the actual performance of the auction mechanism proposed by Erik Maskin (2011). We find that, while the Maskin auction mechanism spends the most from a fixed subsidy budget and leads to the largest emissions reduction, its per-unit emissions reduction cost is higher than that of discriminatory and uniform-price auction mechanisms. Both the Maskin and uniform-price auctions outperform discriminatory auctions in price discovery. Furthermore, from the government’s perspective, the Maskin auctions exhibit the strongest improvement tendency with repeated auctions.
Poverty Persistence and Intra-Household Heterogeneity in Occupations: Some Evidence from Ethiopia
RFF Discussion Paper EfD DP 14-05 | February 2014
Previous studies of poverty in developing countries have to a great extent focused on the characteristics of the household head and used these as proxies for the underlying ability of the household to generate income. This paper uses five rounds of panel data to investigate the persistence of poverty in urban Ethiopia with a particular focus on the role of intra-household heterogeneity in occupations. Dynamic probit and system GMM regression results suggest that international remittances and labor market status of non-head household members are important determinants of households' poverty status. Results also show that controlling for these variables and the initial conditions problem encountered in non-linear dynamic probit models reduces the magnitude of estimated poverty persistence significantly for urban Ethiopia. These findings have important implications for identifying the poor and formulating effective poverty reduction and targeting strategies.
Life Satisfaction in Urban Ethiopia: The Role of Relative Poverty and Unobserved Heterogeneity
RFF Discussion Paper EfD DP 14-04 | February 2014
Unlike most studies of subjective well-being in developing countries, we use a fixed effects regression on three rounds of rich panel data to investigate the impact of relative standing on life satisfaction of respondents in urban Ethiopia. We find a consistently large negative impact of relative standing - both relative to others and to oneself over time - on subjective well-being. However, controlling for unobserved heterogeneity through a fixed effects model reduces the impact of the relative standing variables on subjective well-being by up to 24 percent and reduces the impact of economic status by about 40 percent. Our findings highlight the need to be cautious in interpreting parameter estimates from subjective well-being regressions based on cross-sectional data, as the impact of variables may not be disentangled from that of unobserved heterogeneity.
Optimal Expectations and the Welfare Cost of Climate Variability
Yonas Alem and Jonathan Colmer
RFF Discussion Paper EfD DP 14-03 | February 2014
Uncertainty about the future is an important determinant of well-being, especially in developing countries where financial markets and other market failures result in ineffective insurance mechanisms. However, separating the effects of future uncertainty from realised events, and then measuring the impact of uncertainty on utility, presents a number of empirical challenges. This paper aims to address these issues and provides supporting evidence to show that increased climate variability (a proxy for future income uncertainty) reduces farmers' subjective well-being, consistent with the theory of optimal expectations (Brunnermeier & Parker, 2005 AER), using panel data from rural Ethiopia and a new data set containing daily atmospheric parameters. The magnitude of our result indicates that a one standard deviation (7%) increase in climate variability has an equivalent effect on life satisfaction to a two standard deviation (1-2%) decrease in consumption. This effect is one of the largest determinants of life satisfaction in rural Ethiopia.
Impact of Improved Farm Technologies on Yields: The Case of Improved Maize Varieties and Inorganic Fertilizer in Kenya
Wilfred Nyangena and Ogada Maurice Juma
RFF Discussion Paper EfD DP 14-02 | January 2014
This study investigates the impact of package adoption of inorganic fertilizers and improved maize seed varieties on yield among smallholder households in Kenya. We used a quasi-experimental difference-in-differences approach combined with propensity score matching to control for both time-invariant and unobservable household heterogeneity. Our findings show that inorganic fertilizers and improved maize varieties significantly increase maize yields when adopted as a package, rather than as individual elements. The impact is greater at the lower end of the yield distribution than at the upper end. A positive effect of partial adoption is experienced only in the lower quartile of yield distribution. The policy implication is that complementary agricultural technologies should be promoted as a package, and should target households and areas experiencing low yields.
A Review of Beijing’s Vehicle Lottery: Short-Term Effects on Vehicle Growth, Congestion, and Fuel Consumption
Jun Yang, Ying Liu, Ping Qin, and Antung A. Liu
RFF Discussion Paper EfD DP 14-01 | January 2014
Many cities worldwide have considered vehicle restriction policies to curb proliferating problems of traffic and pollution. At the beginning of 2011, Beijing became the first city to allocate vehicle license plates using a lottery. We provide background on Beijing’s lottery, and analyze its short-term effects. We find that vehicle growth has been sharply curtailed, and congestion has been reduced. However, this policy may not reduce fuel consumption as much as expected.
Promoting Second Generation Biofuels: Does the First Generation Pave the Road?
Håkan Eggert and Mads Greaker
RFF Discussion Paper EfD DP 13-18 | December 2013
The transport sector contributes almost a fifth of the current global emissions of greenhouse gases (GHG), and its share is likely to increase in the future. The US, Brazil, and a number of European and other countries worldwide have introduced various support schemes for biofuels. The advantage of biofuels is that they are easily integrated with the current fossil fuel–based transport sector. However, recent studies question whether the supply of feedstock is sufficient, and to what extent biofuels lead to GHG emission reductions. In addition, studies find that some first generation (1G) biofuels have had a significant impact on food commodity prices. 1G biofuels’ problems can be overcome by a transition to second generation (2G) biofuels. So far, 2G biofuels are much more costly to produce. We therefore ask: To what extent is targeted support to 2G biofuels likely to bring costs down? And are current support schemes for biofuels well designed in order to promote the development of 2G biofuels? We find that ethanol made from cellulose using the biochemical conversion process is far from a ripe technology, with several cost-reducing opportunities yet to be developed. Hence, targeted support to cellulosic ethanol might induce a switch from 1G to 2G biofuels. However, we find little evidence that production and use of 1G biofuels will bridge the conversion to 2G biofuels. The production processes are so different that more use of 1G biofuels will have little impact on technological development in 2G biofuels. Hence, to the extent that private investment in the development of 2G biofuels is too low, current support schemes for 1G fuels may block 2G biofuels instead of promoting them.
The Effect of Hydro-meteorological Emergencies on Internal Migration
Juan Robalino, José Jimenez, and Adriana Chacon
RFF Discussion Paper EfD DP 13-17 | December 2013
We estimate the effect of hydro-meteorological emergencies on internal migration in Costa Rica between 1995 and 2000. Nationwide, we find that an increase of one emergency in a canton significantly increases average migration rates from that canton, after controlling for several social, economic, climatic and demographic factors in both the canton of origin and destination. Moreover, when we separately analyze landslides and fl oods, we find that both increase migration. However, we also find that emergencies with the most severe consequences, those with loss of lives, decrease migration. The severity of the consequences may explain the differences in the sign of the effect in previous research. We also find that emergencies will significantly increase population in metropolitan areas. Less severe emergencies significantly increase migration toward metropolitan areas. More severe emergencies significantly decrease migration toward non-metropolitan areas. This is especially important in developing countries, where cities face problems associated with overpopulation.
The Economic Valuation of Dryland Ecosystem Services in the South African Kgalagadi Area and Implications for PES Involving the Khomani San
Johane Dikgang and Edwin Muchapondwa
RFF Discussion Paper EfD DP 13-16 | December 2013
The economic importance of the dryland ecosystem services in the Kgalagadi area is generally unknown, as is the distribution of benefits from use of the ecosystem services. This study seeks to value ecosystem services in the Kgalagadi area by applying the choice experiment technique and then assessing the potential for ecosystem services to contribute to the Khomani San livelihoods through a payment for ecosystem services (PES) scheme. Instead of finding the value of the whole ecosystem, this study seeks to value selected ecosystem services from the point of view of visitors. The values placed on dryland ecosystem services by tourists are estimated using a conditional logit model, random parameter logit model, and a random parameter logit model with interactions. The park visitors prefer more pristine recreational opportunities and increased chances of seeing predators, but they disapprove of granting more access inside the Kgalagadi Transfrontier Park to local communities. The visitors have a higher marginal willingness to pay (MWTP) for the services that they want than the MWTP of the locals to engage in the competing activities. This scenario shows that it is possible to craft a PES scheme where park visitors could compensate the local communities for accepting restrictions on resource use in the Kgalagadi area. Those who value the services more can pay those who value the services less to refrain from activities that degrade the ecosystem.
The Economic Valuation of Dryland Ecosystem Services in the South African Kgalagadi by the Local Communities
Johane Dikgang and Edwin Muchapondwa
RFF Discussion Paper EfD DP 13-15 | December 2013
This study seeks to value ecosystem services in the Kgalagadi area in South Africa by applying the choice experiment technique. The values placed on dryland ecosystem services by indigenous communities are estimated using a conditional logit model, a random parameter logit model and a random parameter logit model with interactions. The results show that local communities would prefer increased grazing, firewood collection, hunting opportunities, and harvesting of medicinal plants.
Crop-Livestock Inter-linkages and Climate Change Implications for Ethiopia’s Agriculture: A Ricardian Approach
Zenebe Gebreegziabher, Alemu Mekonnen, Rahel Deribe, Samuel Abera, and Meseret Molla Kassahun
RFF Discussion Paper EfD DP 13-14 | December 2013
There have been few attempts to look into the economic impacts of climate change in the context of Ethiopia. Although mixed crop-livestock farming is a dominant farming style, most of the studies on climate change, at least in the context of Ethiopia, have emphasized only crop agriculture and disregarded the role of livestock. In this research, we analyze climate change and agricultural productivity in Ethiopia in its broader sense, inclusive of livestock production. We employ a Ricardian approach, estimating three modified versions of the Ricardian model. Results show that warmer temperature is beneficial to livestock agriculture, while it is harmful to the Ethiopian economy from the crop agriculture point of view. Moreover, increasing/decreasing rainfall associated with climate change is damaging to both agricultural activities.
Reputation and Household Recycling Practices: Field Experiments in Costa Rica
Francisco Alpízar and Elisabeth Gsottbauer
RFF Discussion Paper EfD DP 13-13 | December 2013
Pro-environmental behavior is the willingness to cooperate and contribute to environmental public goods. A good understanding of why individuals undertake pro-environmental actions is important in order to construct policies that are aligned with preferences and actual behavioral patterns, such as concern for social esteem and reputation. In this paper, we present the results of a framed field experiment that explores reputation formation as a driver in support of household recycling practices. We use a "shame" and a "pride" treatment to test which is more effective, if at all, in increasing recycling effort. We find that reputational concerns indeed play a role in shaping individual pro-environmental behavior. Surprisingly, subjects cooperate more if the situation is framed as avoiding shame (bad reputation) rather than as acquiring pride and gratitude (good reputation). The actual experiment is based on a real recycling program, with participants who are heads of urban households in Costa Rica.
Household Fuel Choice in Urban Ethiopia: A Random Effects Multinomial Logit Analysis
Yonas Alem, Abebe D. Beyene, Gunnar Köhlin, and Alemu Mekonnen
RFF Discussion Paper EfD DP 13-12 | October 2013
We use three rounds of a rich panel data set to investigate the determinants of household fuel choice and energy transition in urban Ethiopia. We observe that energy transition did not occur following economic growth in Ethiopia during the past decade. Regression results from a random effects multinomial logit model, which controls for unobserved household heterogeneity, show that households’ economic status, price of alternative energy sources, and education are important determinants of fuel choice in urban Ethiopia. The results also suggest the use of multiple fuels, or “fuel stacking behavior.” We argue that policy makers could target these variables to encourage transition to cleaner energy sources.
Will a Driving Restriction Policy Reduce Car Trips? A Case Study of Beijing, China
Lanlan Wang, Jintao Xu, Xinye Zheng, and Ping Qin
RFF Discussion Paper EfD DP 13-11 | October 2013
A driving restriction policy, as a control-and-command rationing measure, is a politically acceptable policy tool to address traffic congestion and air pollution in some countries and cities. Beijing was the first city in China to implement this policy. A one-day-a-week driving restriction scheme was expected to take 20 percent of cars off the road every weekday. Using household survey and travel diary data, we analyze the short-term effect of the driving restriction policy on individual mode choice. The data also allow us to identify which demographic groups are more likely to break the rules. The estimates reveal that the restriction policy in Beijing does not have a significant influence on individual driving choices, as compared with its influence on public transit. The rule-breaking behavior is constant and pervasive. We found that 47.8 percent of the regulated car owners didn’t follow the rules and drove "illegally" to their destinations. On average, car owners who traveled during peak hours or for work trips, and those whose destinations were farther away from the city center or subway stations, were more likely to break the rules.
Risk Perception, Choice of Drinking Water, and Water Treatment: Evidence from Kenyan Towns
Joseph Onjala, Simon Wagura Ndiritu, and Jesper Stage
RFF Discussion Paper EfD DP 13-10 | July 2013
This study uses household survey data from four Kenyan towns to examine the effect of households' characteristics and risk perceptions on their decision to treat/filter water as well as their choice of main drinking water source. Because the two decisions may be jointly made by the household, a seemingly unrelated bivariate probit model is estimated. It turns out that treating non-piped water and using piped water as a main drinking water source are substitutes. The evidence supports the finding that perceived risks significantly correlate with a household’s decision to treat/filter unimproved non-pipe water before drinking it. The study also finds that higher connection fees reduce the likelihood of households connecting to the piped network. Because the current connection fee acts as a cost hurdle that deters households from getting a connection, the study recommends a system where households pay the connection fee in instalments, through a prepaid water scheme or through a subsidy scheme.
Conservation Fees in the Kgalagadi Transfrontier Park between Botswana and South Africa in the Presence of Land Restitution
Johane Dikgang and Edwin Muchapondwa
RFF Discussion Paper EfD DP 13-09 | July 2013
This paper estimates the visitation demand function for Kgalagadi Transfrontier Park (KTP) in order to determine the conservation fee to charge South African residents to maximise park revenue. We conducted contingent behaviour experiments at KTP and three other national parks, which we assume are either substitutes or complements for visitors to KTP. Our random effects Tobit model shows that there is a wide variation in the own-price elasticities of demand between the parks, but they are generally not elastic. The cross-price estimates indicate that there is limited substitutability in visitation demand among the four parks. The study uses the unitary elasticity rule to demonstrate that there is a possibility of raising conservation fees to revenue-maximising levels at KTP, as well as the other parks, using methods such as a mandatory conservation fee increment or a community-bound voluntary donation above the regular conservation fee. Sharing conservation revenue with communities surrounding parks could demonstrate the link between ecotourism and local communities’ economic development, promote a positive view of land restitution involving national parks, help address South Africa’s heavily skewed distribution of income, and act as an incentive for the local communities to participate in conservation even more.
Biofuels, Economic Growth, and the External Sector in Ethiopia: A Computable General Equilibrium Analysis
Tadele Ferede, Zenebe Gebreegziabher, Alemu Mekonnen, Fantu Guta, Jörgen Levin, and Gunnar Köhlin
RFF Discussion Paper EfD DP 13-08 | July 2013
In this study, we assess the economy-wide effects of biofuel investment in Ethiopia, with a focus on the external sector. The Government of Ethiopia has been revising its energy policy to switch from imported fossil oil to domestically produced biofuels, partly in response to climate change and partly in response to rising world oil prices, which leave oil-importing countries such as Ethiopia vulnerable to external oil price shocks. In Ethiopia, the value of oil imports relative to export earnings has increased over time, which has negatively impacted its balance of payments. Specifically, this paper assesses the implications of biofuels investment for growth and the external sector in Ethiopia using a dynamic recursive computable general equilibrium (CGE) model. The study is based on primary data collected from biofuel firms in Ethiopia and assumes that the amount of land is fixed in a given period. The results indicate that the macroeconomic and sectoral effects of biofuel investment in the context of Ethiopia are mixed. Biofuel expansion can help to improve economic growth if such expansion generates spillover effects, with jatropha and castor bean found to have the strongest positive impact on the economy. Without spillovers, the effect of biofuel investment on economic growth is negligible, indicating the importance of technology transfers. The impact on the external sector, especially on exports and imports, is negative, as biofuels expansion affects both the real exchange rate and production of export commodities. This negative effect might be mitigated by policies encouraging biofuels investment to move in a direction that does not compete with the use of land for traditional export crops.
Community Controlled Forests, Carbon Sequestration and REDD+: Some Evidence from Ethiopia
Abebe D. Beyene, Randall Bluffstone, and Alemu Mekonnen
RFF Discussion Paper EfD DP 13-07 | March 2013
REDD+ (Reduced Emissions from Deforestation and Forest Degradation, "plus" afforestration) is a tool that supports forest carbon-enhancing approaches in the developing world in order to mitigate and hopefully reverse climate change. A key issue within REDD+ is to appropriately bring in the almost 25% of developing country forests that are effectively controlled by communities. Many authors have discussed the social aspects of appropriateness, but there is limited analysis of the actual carbon sequestration potential of better-managed community controlled forests (CCFs). Drawing on an analytical framework that relies heavily on the common property and social capital literatures, our paper contributes to closing this research gap and sheds light on whether community forest management structures should be given serious consideration as REDD+ partners in the battle to mitigate climate change. Using household and community level data from four regional states in Ethiopia, we examine whether CCFs with design features known to be associated with better management appear to sequester more carbon than community systems with lower levels of these characteristics. The empirical analysis suggests that the quality of local level institutions may be important determinants of carbon sequestration. Developing country CCFs may therefore play a positive role within the context of REDD+ and other carbon sequestration initiatives. However, because of the nature of our data, results should be considered indicative. Better and smarter data combined with innovative techniques are needed to conclusively evaluate linkages between CCFs, carbon sequestration and REDD+.
Implementing REDD through Community-Based Forest Management: Lessons from Tanzania
Elizabeth J.Z. Robinson, H.J. Albers, Charles Meshack, and Razack B. Lokina
RFF Discussion Paper EfD DP 13-06 | March 2013
REDD (Reduced Emissions from Deforestation and Degradation) aims to slow carbon releases caused by forest disturbance by making payments conditional on forest quality over time. Like earlier policies to slow deforestation, REDD must change the behaviour of forest degraders. Broadly, it can be implemented with payments to potential forest degraders, thus creating incentives; through payments for enforcement, thus creating disincentives; or through addressing external drivers such as urban charcoal demand. In Tanzania, community-based forest management (CBFM), a form of participatory forest management (PFM), was chosen as the model for implementing REDD pilot programs. Payments are made to villages that have the rights to forest carbon. In exchange for these payments, the villages must demonstrably reduce deforestation at the village level. Using this pilot program as a case study, we provide insights for REDD implementation in sub-Saharan Africa. We pay particular attention to leakage, monitoring and enforcement. We suggest that implementing REDD through CBFM-type structures can create appropriate incentives and behavioural change when the recipients of the REDD funds are also the key drivers of forest change. When external forces drive forest change, however, REDD through CBFM-type structures becomes an enforcement program, with local communities rather than government agencies being responsible for the enforcement. That structure imposes costs on local communities, whose local authority limits the ability to address leakage outside the particular REDD village. In addition, for REDD to lead to lower emissions, implementation will have to emphasize conditionality of payments on measurable decreases in forest loss.
Water Resources Planning under Climate Change: A “Real Options” Application to Investment Planning in the Blue Nile
Marc Jeuland and Dale Whittington
RFF Discussion Paper EfD DP 13-05 | March 2013
This article develops a "real options" approach for planning new water resources infrastructure investments and their operating strategies in a world of climate change uncertainty. The approach is illustrated with an example: investments in large new multipurpose dam alternatives along the Blue Nile in Ethiopia. The approach incorporates flexibility in design and operating decisions – the selection, sizing, and sequencing of new dams, and reservoir operating rules. The analysis relies on a simulation model that includes linkages between climate change and system hydrology, and tests the sensitivity of the economic outcomes of investments in new dams to climate change and other uncertainties. Not surprisingly, the results for the Blue Nile basin show that there is no single investment plan that performs best across a range of plausible future climate conditions. The value of the real options framework is that it can be used to identify dam configurations that are both robust to poor outcomes and sufficiently flexible to capture high upside benefits if favorable future climate and hydrological conditions arise. The real options approach could be extended to explore design and operating features of development and adaptation projects other than dams.
On Social Sanctions and Beliefs: A Pollution Norm Example
Jorge H. Garcia and Jiegen Wei
RFF Discussion Paper EfD DP 13-04 | February 2013
A prevailing view in the literature is that social sanctions can support, in equilibrium, high levels of obedience to a costly norm. The reason is that social disapproval and stigmatization faced by the disobedient are highest when disobedience is the exception rather than the rule in society. In contrast, the (Bayesian) model introduced here shows that imperfect information causes the expected social sanction to be lowest precisely when obedience is more common. This, amongst other …findings, draws a distinct line between social and moral sanctions, both of which may depend on others’behavior but not on action observability.
The Dynamics of Electric Cookstove Adoption: Panel Data Evidence from Ethiopia
Yonas Alem, Sied Hassen, Gunnar Köhlin
RFF Discussion Paper EfD DP 13-03 | January 2013
Previous studies on improved cookstove adoption in developing countries use cross-sectional data, which makes it difficult to control for unobserved heterogeneity and investigate what happens to adoption over time. We use robust non-linear panel data and hazard models on three rounds of panel data from urban Ethiopia to investigate the determinants and dynamics of electric cookstove adoption. We find the price of electricity and firewood, and access to credit as major determinants of adoption and transition. Our findings have important implications for policies aiming at promotion of energy transition and reduction of the pressure on forest resources in developing countries.
The Distributive Effect and Food Security Implications of Biofuels Investment in Ethiopia: A CGE Analysis
Zenebe Gebreegziabher, Alemu Mekonnen, Tadele Ferede, Fantu Guta, Jörgen Levin, Gunnar Kohlin, Tekie Alemu, and Lars Bohlin
RFF Discussion Paper EfD DP 13-02 | January 2013
In response to global opportunities and domestic challenges, Ethiopia is revising its energy policy to switch from high-cost imported fossil fuel to domestically produced biofuels. Currently, there are biofuel investment activities in different parts of the country to produce ethanol and biodiesel. However, there is no rigorous empirical study to assess impacts of such investments. This paper assesses the distributive effect and food security implications of biofuels investment in Ethiopia, using data from 15 biofuels firms and 2 NGOs in a CGE (computable general equilibrium) analysis. Findings suggest that biofuels investments in the context of Ethiopia might have a ‘win-win’ outcome that can improve smallholder productivity (food security) and increase household welfare. In particular, the spillover effects of certain biofuels can increase the production of food cereals (with the effect being variable across regions) without increasing cereal prices. When spillover effects are considered, biofuel investment tends to improve the welfare of most rural poor households. Urban households benefit from returns to labor under some scenarios. These findings assume that continued government investment in roads allows biofuels production to expand on land that is currently unutilized, so that smallholders do not lose land. Investment in infrastructure such as roads can thus maximize the benefits of biofuels investment.
Thanks but No Thanks: A New Policy to Avoid Land Conflict
Martin Dufwenberg, Gunnar Kohlin, Peter Martinsson, and Haileselassie A Medhin
RFF Discussion Paper EfD 13-01 | January 2013
Land conflicts can be detrimental. An important goal of development policy is to help define and instill respect for borders. This is often implemented through mandatory and expensive interventions that rely on the expansion of government land administration institutions. We bring to the table a new policy that, in theory, promotes neighborly relations and equitable divisions at low cost. The salient features of this policy would be the existence of a regulatory institution and the option to bypass regulation in favor of a cooperative solution. Such a policy is particularly relevant when the government formally owns the land but tenure rights are about to be individualized. The key idea combines the logic of forward induction with the insight that social preferences transform social dilemmas into coordination problems. As a first and low-cost pass at empirical evaluation, we conduct a framed field experiment among farmers in the Ethiopian highlands, a region exhibiting features typical of many countries where borders are often disputed.
Automobile Usage and Urban Rail Transit Expansion
Zenebe Gebreegziabher, Alemu Mekonnen, Tadele Ferede, Fantu Guta, Jörgen Levin, Gunnar Kohlin, Tekie Alemu, and Lars Bohlin
Using individual travel diary data collected before and after the rail transit coverage expansion in urban Beijing, this paper estimates the impact of rail accessibility improvement on the usage of rail transit, automobiles, buses, walking, and bicycling, measured as percent distance traveled by each mode in an individual trip. My results indicate that the average rail transit usage significantly increased, by 98.3% for commuters residing in the zones where the distances to the nearest station decreased because of the expansion, relative to commuters in the zones where the distances did not change. I also find that auto usage significantly decreased, by 19.8%, while the impact on bus usage was small and not statistically significant. Average walking and bicycling distance (combined) increased by 11.8%, indicating that walking and bicycling are complements to urban rail transit, instead of substitutes. Furthermore, I find that estimated changes in auto usage and rail transit usage vary significantly with auto ownership and income.
Evaluating the Prospects of Benefit Sharing Schemes in Protecting Mountain Gorillas in Central Africa
Samson Mukanjari, Edwin Muchapondwa, Precious Zikhali, Birgit Bednar-Friedl
RFF Discussion Paper EfD 12-16 | November 2012
Presently, the mountain gorilla in Rwanda, Uganda, and the Democratic Republic of Congo is endangered mainly by poaching and habitat loss. This paper sets out to investigate the possible resolution of poaching involving the local community by using benefit sharing schemes with local communities. Using a bioeconomic model, the paper demonstrates that the current revenue sharing scheme yields suboptimal conservation outcomes. It is shown, however, that a performance-linked benefit sharing scheme in which the Park Agency makes payment to the local community based on the growth of the gorilla stock can achieve socially optimal conservation. This scheme renders unnecessary poaching effort by the local community. Therefore, it becomes unnecessary to impose poaching fines and anti-poaching enforcement on the local community. Given the huge financial outlay requirements for the ideal benefit sharing scheme, the Park Agencies in Central Africa could reap more financial benefits for use in conservation if they employ an oligopolistic pricing strategy for gorilla tourism.
Abalone Conservation in the Presence of Drug Use and Corruption: Implications for Its Management in South Africa
Edwin Muchapondwa, Kerri Brick, Martine Visser
RFF Discussion Paper EfD 12-15 | November 2012
The illegal exploitation of wild abalone in South Africa has been escalating since 1994, despite increased enforcement, leading to collapse in some sections of its range. South Africa banned all wild abalone fishing in 2008 but controversially reopened it in 2010. This paper formulates a poacher’s model, taking into account the realities of the abalone terrain in South Africa—the prevalence of bribery, corruption, use of recreational drugs, and the high value of abalone—to explore why poaching has not subsided. The paper suggests two additional measures that might help ameliorate the situation: eliminating the demand side through enforcement targeted on organized crime, and ceding the resource to the local coastal communities. However, local communities need to be empowered to deal with organised crime groups. Complementary measures to bring back community patriotism will also be needed given the tattered social fabric of the local coastal communities.
Cooperation and Climate Change: Can Communication Facilitate the Provision of Public Goods in Heterogeneous Settings?
Allen Blackman, Maria Naranjo, Juan Robalino, Francisco Alpízar, Jorge Rivera
RFF Discussion Paper EfD 12-14 | November 2012
International and domestic efforts to reduce greenhouse gas emissions require a coordinated effort from heterogeneous actors. This experiment uses a public good game with a climate change framing to consider whether cooperation is possible in just such a climate change context. Specifically, we examine whether groups of heterogeneous individuals can meet a collective emissions reduction target through individual contributions. Participants represent two different sectors of society with differing marginal costs of abatement. Thus, the equity considerations that make climate change such a contentious issue are implicit in the experiment framing. Subjects are able to communicate with one another in order to coordinate contribution strategies. The results indicate that participatory processes and stakeholder engagement play an important role in promoting cooperation—even when heterogeneity is present. However, heterogeneity makes it more difficult for groups to reach consensus on how to distribute an abatement burden. Further, the non-binding nature of the agreement results in significant levels of free-riding. In addition, heterogeneity appears to provide disadvantaged player-types with a justification for free-riding. Ultimately, the results indicate that participatory processes alone are not sufficient to induce widespread compliance with a mitigation obligation.
Does Tourism Eco-Certification Pay? Costa Rica’s Blue Flag Program
Allen Blackman, Maria Naranjo, Juan Robalino, Francisco Alpízar, Jorge Rivera
RFF Discussion Paper EfD 12-13 | November 2012
Tourism associated with beaches, protected areas, and other natural resources often has serious environmental impacts. The problem is especially acute in developing countries, where nature-based tourism is increasingly important and environmental regulation is typically weak. Eco-certification programs—voluntary initiatives certifying that tourism operators meet defined environmental standards—promise to help address this problem by creating a private-sector system of inducements, monitoring, and enforcement. But to do that, they must provide incentives for tourism operators to participate, such as price premiums and more customers. Rigorous evidence on such benefits is virtually nonexistent. To help fill this gap, we use detailed panel data to analyze the effects of the Blue Flag Program, a leading international eco-certification program, in Costa Rica, where nature-based tourism has caused significant environmental damage. We use new hotel investment to proxy for private benefits, and fixed effects and propensity score matching to control for self-selection bias. We find that past Blue Flag certification has a statistically and economically significant effect on new hotel investment, particularly in luxury hotels. Our results suggest that certification has spurred the construction of 12 to 19 additional hotels per year in our regression samples. These findings provide some of the first evidence that eco-certification can generate private benefits for tourism operators in developing countries and therefore has the potential to improve their environmental performance.
Evaluation of the Status of the Namibian Hake Resource (Merluccius spp.) Using Statistical Catch-at-Age
Carola Kirchner, Paul Kainge, and Johannes Kathena
RFF Discussion Paper EfD 12-12 | October 2012
Namibian hake is the most important fish resource in Namibia. This monograph is a compilation of all the hake data, historic and recent, that has been used to inform stock assessment and management since the late 1970s. It presents the statistical catch-at-age analysis used to evaluate the state of the Namibian hake resource under different assumptions. This analysis treats the two hakes, Merluccius paradoxus and M. capensis, as a single stock. The data and modeling show that the stock has not as yet recovered to its maximum sustainable yield level, despite foreign fishing effort having been removed in 1990. Best estimates suggest the current stock to be roughly 20% of pre-exploitation levels; however this figure is sensitive to model assumptions. Signs indicate that the stock is slowly recovering from its all-time low in 2002-2004. Because the two hake species are pooled for assessment, the resource is currently managed on a relatively simple adaptive basis; 80% of the estimated replacement yield is reserved for fishing, the remainder being left for rebuilding.
REDD+ and Community-Controlled Forests in Low-Income Countries: Any Hope for a Linkage?
Randy Bluffstone, Elizabeth J.Z. Robinson, and Paul Guthiga
RFF Discussion Paper EfD 12-11 | October 2012
Deforestation and forest degradation are estimated to account for between 12 percent and 20 percent of annual greenhouse gas emissions. These activities, largely in the developing world, released about 5.8 Gt per year in the 1990s, which was more than all forms of transport combined. The idea behind REDD+ is that payments for sequestering carbon can tip the economic balance away from loss of forests and in the process yield climate benefits. Recent analysis has suggested that developing country carbon sequestration can effectively compete with other climate investments as part of a cost-effective climate policy. This paper focuses on opportunities and complications associated with bringing community-controlled forests into REDD+. About 25 percent of developing country forests are community controlled; therefore, it is difficult to envision a successful REDD+ program without coming to terms with community controlled forests. It is widely agreed that REDD+ offers opportunities to bring value to developing country forests, but there are also concerns related to insecure and poorly defined community forest tenure, informed by often long histories of government unwillingness to meaningfully devolve ownership rights to communities. Further, because communities are complicated systems, there is also concern that REDD+ could destabilize existing well-functioning community forestry systems.
The Valuation of Biodiversity Conservation by the South African Khomani San “Bushmen” Community
Johane Dikgang and Edwin Muchapondwa
RFF Discussion Paper EfD 12-10 | October 2012
The restitution of parkland to the Khomani San “bushmen” and Mier “agricultural” communities in May 2002 marked a significant shift in conservation in the Kgalagadi Transfrontier Park and environs in South Africa. Biodiversity conservation will benefit from this land restitution only if the Khomani San, who interact with nature more than do other groups, are good environmental stewards. To assess their attitude toward biodiversity conservation, this study used the contingent valuation method to investigate the values the communities assign to biodiversity conservation under three land tenure arrangements in the Kgalagadi area. For each community and land tenure arrangement, there are winners and losers, but the winners benefit by more than the cost that losers suffer. The net worth for biodiversity conservation under the various land tenure regimes ranged from R928 to R3,456 to R4,160 for municipal land, parkland, and communal land respectively for the Khomani San, compared to R25,600 to R57,600 to R64,000 for municipal land, parkland, and communal land respectively for the Mier. Both communities have the highest preference for the implementation of the biodiversity conservation programme on communal land. There are no significant differences in the WTP between the two communities when adjusted for annual median household income; hence, the Khomani San can be trusted to become good environmental stewards. However, in order for all members of the local communities to support biodiversity conservation unconditionally, mechanisms for fair distribution of the associated costs and benefits should be put in place.
Contract Duration under Incomplete Land Ownership Rights: Empirical Evidence from Rural Ethiopia
Abebe D. Beyene, Mintewab Bezabih, and Zenebe Gebreegziabher
RFF Discussion Paper EfD 12-09 | July 2012
Using the land tenure system in Ethiopia as a case study, the authors assessed the links between land owners’ tenure insecurity, associated behavioral factors, and contract length. In this paper, they analyze these links with survey data of rural households in the Amhara National Regional State of Ethiopia. The empirical strategy follows a hazard function model employed in duration data analyses and investigates the fitness of the data to the alternative exponential and Weibull functional forms. The results show that landlords’ risk aversion increases the duration of contracts, which is in line with the reverse tenancy argument that landlords’ risk preferences affect land-contract decisions. The findings of the study also indicate that tenure insecurity is a critical factor in the nature and length of contracts; hence, policies should aim to reduce landlords’ frustrations regarding future land redistribution by the state. An important implication of the results is that secure tenure systems can reduce the disincentives from tenure insecurity due to uncertainty about contract duration and thereby enhance tenants’ welfare. Longer-term and stable contracts can improve the land rental market. In addition, the impact of risk preferences points toward the importance of poverty in the functioning of the land rental market.
Nudging Boserup? The Impact of Fertilizer Subsidies on Investment in Soil and Water Conservation
Godwin Kofi Vondolia, Håkan Eggert, and Jesper Stage
RFF Discussion Paper EfD 12-08 | June 2012
The new fertilizer subsidies in sub-Saharan Africa are intended to increase agricultural production and ensure development of a fertilizer market. Fertilizer adoption requires complementary inputs, such as investment in soil and water conservation (SWC), for efficient and optimal nutrient uptake, and many fertilizer subsidy programs implicitly assume that fertilizer subsidies crowd in such investments. The results of this study of the impact of fertilizer subsidies on SWC efforts in Ghana indicate that beneficiaries of the program do not invest significantly more in SWC. This suggests that policies should not expect farmers to respond to fertilizer subsidies with substantial investment in SWC. Thus, in order to achieve increased investment in SWC for sustainable agricultural development, more comprehensive measures that include fertilizer investments explicitly (such as integrated soil fertility management programs) may be needed.
Insiders, Outsiders, and the Role of Local Enforcement in Forest Management: An Example from Tanzania
Elizabeth J.Z. Robinson, Heidi J. Albers, Razack Lokina, and Guyslain Ngeleza
RFF Discussion Paper EfD 12-07 | June 2012
Typically both local villagers (“insiders”) and non-locals (“outsiders”) extract products from protected forests even though the activities are illegal. This paper suggests that, depending on the relative ecological damage caused by each group, budget-constrained forest managers may be able to reduce total forest degradation by legalizing “insider” extraction in return for local villagers involvement in enforcement activities. The authors illustrate this through the development of a game-theoretic model that considers explicitly the interaction between the forest manager who can combine a limited enforcement budget with legalization of insider resource extraction and livelihood projects such as bee keeping, insider villagers, and outsider charcoal producers.
Households’ Willingness to Pay for Improved Urban Waste Management in Mekelle City, Ethiopia
Dagnew Hagos, Alemu Mekonnen, and Zenebe Gebreegziabher
RFF Discussion Paper EfD 12-06 | April 2012
Cities in developing countries experiencing rapid urbanization and population growth too often lack the financial resources and institutional capacity to provide needed municipal infrastructure for adequate solid waste management, despite citizens’ demand for it. The authors use a cross-sectional survey of 226 randomly selected households in Mekelle City, Ethiopia, plus Tobit and probit models, to assess factors that influence households’ willingness to pay for improved urban waste management and suggest mechanisms for cost recovery.
Ex Post Evaluation of Forest Conservation Policies Using Remote Sensing Data: An Introduction and Practical Guide
RFF Discussion Paper EfD 12-05 | March 2012
Rigorous, objective evaluation of forest conservation policies in developing countries, which is needed to ensure that the resources devoted to these policies are put to good use, remain uncommon. This paper provides a nontechnical introduction and practical guide to a relatively low cost method that relies on remote sensing data to support ex post analysis of forest conservation policies. It describes the defining features of this approach, catalogues and briefly reviews the studies that have used it, discusses the requisite data, explains the principal challenges to its use and the empirical strategies to overcome them, provides some practical guidance on modeling choices, and describes in detail two recent case studies.
Voluntary Environmental Agreements in Developing Countries: The Colombian Experience
Allen Blackman, Eduardo Uribe, Bart van Hoof, and Thomas P. Lyon
RFF Discussion Paper EfD 12-04 | February 2012
According to proponents, voluntary agreements (VAs) negotiated with polluters sidestep weak institutions and other barriers to conventional environmental regulation in developing countries. Yet little is known about their effectiveness. The authors examine VAs in Colombia, a global leader in the use of these policies. They find that the main motive for using VAs has been to build capacity needed for broader environmental regulatory reform. The additional effect of Vas on environmental performance has been questionable. These findings suggest that in developing countries, VAs may be best suited to capacity building, not environmental management per se.
The Role of Incentives for Sustainable Implementation of Marine Protected Areas: An Example from Tanzania
Elizabeth J.Z. Robinson, Heidi J. Albers, and Stephen L. Kirama
RFF Discussion Paper EfD 12-03 | February 2012
Marine Protected Areas (MPAs) are an increasingly popular policy tool for protecting marine stocks and biodiversity, but they pose high costs for small-scale fishers who have few alternative options for work in poor countries. MPAs often address this burden on local households by providing some benefits to compensate locals and/or induce compliance with restrictions. The authors argue that MPAs in poor countries can only contribute to sustainability if management induces changes in resource-dependent households’ incentives to fish. With Tanzania’s Mnazi Bay Ruvuma Estuary Marine Park and its internal villages as an example, they use an economic decision modeling framework to examine incentives, reaction to incentives, and implications for sustainable MPA management.
Plot and Household-Level Determinants of Sustainable Agricultural Practices in Rural Tanzania
Menale Kassie, Moti Jaleta, Bekele Shiferaw, Frank Mmbando, Geoffrey Muricho
RFF Discussion Paper EfD 12-02 | January 2012
The authors examine adoption decisions for sustainable agricultural practices (SAPs), using multiple cross-sectional, plot-level observations from rural Tanzania in 2010, and a multivariate probit technique to model simultaneous adoption decisions by farm households. Their study reveals that rainfall, insect, and disease shocks; government effectiveness; tenure status of plot; social capital; plot location and size; and asset ownership all influence farmers’ adoption of sustainable practices. SAP policies aimed at organizing farmers into associations, improving land tenure security, and enhancing skills of civil servants can increase the likelihood that smallholder farmers will adopt SAPs.
Coping with Fuelwood Scarcity: Household Responses in Rural Ethiopia
Abebe Damte, Steven F. Koch, Alemu Mekonnen
RFF Discussion Paper EfD 12-01 | January 2012
The authors used survey data from randomly selected rural households in Ethiopia to examine coping mechanisms employed to deal with fuelwood scarcity. The determinants of collecting other biomass energy sources were also examined. The authors’ analysis shows that households in forest-degraded areas respond by increasing their labor for fuelwood collection during shortages. For households in better-forested regions, forest stock and forest access may be more important in determining labor for fuelwood collection. There is limited evidence of substitution of dung or crop residue for fuelwood. Natural resource and forest management policies, especially related to rural energy, should distinguish regions with different levels of forest degradation.
|Private Trees as Household Assets and Determinants of Tree-Growing Behavior in Rural Ethiopia|
Alemu Mekonnen and Abebe Damte
RFF Discussion Paper EfD 11-14 | December 2011
This study analyzes the decisions of rural households in Ethiopia of whether to grow trees and, if so, how many. The authors used household- and parcel-level data from the four major regions of Ethiopia and analyzed them with a zero-inflated negative binomial model, Heckman’s two-step procedure, and panel data techniques. Their findings show the importance of parcel-level analysis as well as household-level analysis, and that the determinants for growing trees are not the same for deciding the number of trees. The results also suggest a need for education on the role of trees.
What Do Respondents Bring to Contingent Valuation? A Comparison of Monetary and Labor Payment Vehicles
Godwin Kofi Vondolia, Håkan Eggert, Ståle Navrud, and Jesper Stage
RFF Discussion Paper EfD 11-13 | December 2011
With contingent valuation, that which is being valued and the payment vehicle used to value it are both mostly hypothetical. The impact of experience with a good on the willingness to pay is well studied, but less attention has been given to payment vehicles. The authors examined how this influences responses to a contingent valuation scenario of maintenance for irrigation canals, using a split-sample survey and convergent validity tests. They found that experience with both monetary and labor payment vehicles reduces the time/money response asymmetries in acceptance rates.
Impacts of Policy Measures on the Development of State-Owned Forests in Northeast China: Theoretical Results and Empirical Evidence
Xuemei Jiang, Peichen Gong, Göran Bostedt, and Jintao Xu
RFF Discussion Paper EfD 11-12 | December 2011
The authors examined the effects of forest policies and socioeconomic conditions on state-owned forest enterprises (SOFEs) in northeast China and Inner Mongolia. Both the extent to which supervisory authorities emphasized improving forest resources and the increases in SOFE management expenses affected harvest and investment decisions as well as development of forest resources. Promotion of non-timber resources and reforms for more efficient forest management reduced timber harvests as intended, while improving investment and forest resources. However, these effects were relatively small. In contrast, reforms aimed at timber harvest and afforestation activities actually increased the timber harvest, negatively affecting development of forest resources.
The Use of Hypothetical Baselines in Stated Preference Surveys
Dale Whittington and Wiktor Adamowicz
RFF Discussion Paper EfD 11-11 | December 2011
Researchers using stated preference (SP) techniques increasingly rely on “hypothetical baselines.” The authors argue that hypothetical baselines are often used without careful consideration of the cognitive challenges they pose for respondents or the difficulties this practice creates for advising policymakers. Four types of SP studies are presented, two of which rely on hypothetical baselines, with six conditions that may be changed to create a hypothetical baseline. The authors discuss four main reasons why SP analysts use hypothetical baselines, some risks associated with hypothetical baselines, and guidance for use.
Farmers’ Response to Rainfall Variability and Crop Portfolio Choice: Evidence from Ethiopia
Mintewab Bezabih, Salvatore Di Falco, and Mahmud Yesuf
RFF Discussion Paper EfD 11-10 | December 2011
This paper studies the patterns of farmers’ crop choices for a multiple-crop portfolio, where production risk considerations and rainfall uncertainty are likely to be critical factors. Our analysis
employs plot-level panel data from Ethiopia, combined with seasonal and yearly rainfall variability (from 30 years of meteorological data corresponding to the survey villages). Using the single index approach, our results indicate that the combined riskiness of crop portfolios at a household level responds negatively to annual rainfall variability, while seasonal rainfall variability has less consistent impact. Farmers are more likely to select less risky crops with less return, even when intercrop interactions are taken into account. Moreover, development policies designed to enhance accumulation and risk taking should take into account the importance of such exogenous factors as weather in ex-ante risk taking.
Climate Change and the Ethiopian Economy: A Computable General Equilibrium Analysis
Zenebe Gebreegziabher, Jesper Stage, Alemu Mekonnen, and Atlaw Alemu
RFF Discussion Paper EfD 11-09 | October 2011
This paper analyses the economic impacts of climate change on Ethiopia’s agriculture using a countrywide computable general equilibrium model. The impacts on agriculture are based on results from a Ricardian model where current (and future) agricultural production is analyzed as a function of temperature and precipitation. We project that the effect of overall climate change will be relatively benign until approximately 2030 and then worsen considerably. Our simulation results indicate that, over a 50-year period, the projected reduction in agricultural productivity may lead to 30 percent less average income, compared with the possible outcome in the absence of climate change. Autonomous adaptations that the farmers make and government policies in response will be crucial for Ethiopia’s future development.
Does Eco-Certification Boost Regulatory Compliance in Developing Countries? ISO 14001 in Mexico
RFF Discussion Paper EfD 11-08 | August 2011
Private sector initiatives certifying that producers of goods and services adhere to defined environmental process standards are increasingly popular worldwide. According to proponents, they can circumvent chronic barriers to effective public sector environmental regulation in developing countries. But eco-certification programs will have limited effects on producers’ environmental performance if, as one would expect, they select for those already meeting certification standards. Rigorous evaluations of the environmental effects of eco-certification in developing countries that control for selection bias are rare. The author used plant-level data on more than 80,000 Mexican facilities to determine whether ISO 14001 series certification of environmental management systems boosts regulatory compliance.
Conditional Cash Transfers and Payments for Environmental Services A Conceptual Framework for Explaining and Judging Differences in Outcomes
U. Martin Persson, Francisco Alpízar
RFF Discussion Paper EfD 11-06 | May 2011
Factors that determine the success of conditional cash transfers and payments for environmental services programs are not well understood. The authors developed a conceptual framework for insight, using an agent-based model and validating the results with empirical data from existing programs. The percentage of participants who meet program conditions at baseline can predict program efficiency, but selection bias erodes it, due to participants that already meet program criteria self-selecting at high rates into a program. They also discuss possibilities for improving efficiency and evaluation criteria for these programs.
Sustainable Agricultural Practices and Agricultural Productivity in Ethiopia: Does AgroecologyMatter?
Menale Kassie, Precious Zikhali, John Pender, Gunnar Kohlin
RFF Discussion Paper EfD 11-05 | May 2011
Using household- and plot-level data from surveys in the Tigray and Amhara highlands of Ethiopia, the authors examine the contribution of sustainable land-management practices to net values of agricultural production. Both parametric and nonparametric estimations consistently predicted that minimum tillage was superior to commercial fertilizers, as were farmers’ traditional practices without commercial fertilizers in areas with low agricultural potential. By contrast, commercial fertilizers were better than minimum tillage and traditional practices in areas with high agricultural potential. The results highlight the need to carefully target sustainable land-management practices.
Choice Experiments in Environmental Impact Assessment: The Case of the Toro 3 Hydroelectric Project and the Recreo Verde Tourist
Dora Carías Vega, Francisco Alpízar
RFF Discussion Paper EfD 11-04 | May 2011
Choice experiments, a stated-preference valuation method, can assign monetary values to environmental externalities during the ex-ante stages of environmental impact assessments (EIA). This case study looks at Costa Rica’s Toro 3 hydroelectric project and its impacts on the Recreo Verde tourism center, using questionnaires with hypothetical but realistic scenarios for consumers to generate restoration alternatives for the affected good. Choice experiments have limitations that must be taken into account in EIA, but incorporating economic parameters—especially resource constraints and tradeoffs—can substantially enrich the assessment.
Health Impacts of Power-Exporting Plants in Northern Mexico
Allen Blackman, Santosh Chandru, Alberto Mendoza-Domínguez, and Armistead G. Russell
RFF Discussion Paper EfD 11-03-REV | April 2011
In the past two decades, rapid population and economic growth on the U.S.–Mexico border has spurred a dramatic increase in electricity demand. In response, American energy multinationals have built power plants just south of the border that export most of their electricity to the United States. This development has stirred considerable controversy because these plants effectively skirt U.S. environmental air pollution regulations in a severely degraded international airshed. Yet to our knowledge, this concern has not been subjected to rigorous scrutiny. This paper uses a suite of air dispersion, health impacts, and valuation models to assess the human health damages in the United States and Mexico caused by air emissions from two power-exporting plants in Mexicali, Baja California. The authors find that these emissions have limited but nontrivial health impacts, mostly by exacerbating particulate pollution in the United States, and value these damages at more than half a million dollars per year. These findings demonstrate that power-exporting plants can have cross-border health effects and bolster the case for systematically evaluating their environmental impacts.
Use of Anthropometric Measures to Analyze How Sources of Water and Sanitation Affect Children’s Health in Nigeria
Sunday Olabisi Adewara and Martine Visser
RFF Discussion Paper EfD 11-02 | April 2011
The authors used 2008 DHS data sets to construct child height- and weight-for-age Z-scores and used regression analysis to analyze the effects of different sources of drinking water and sanitation on child health outcomes in Nigeria. They also calculated the probability of a child being stunted or underweight as a measure of malnutrition among children aged 0–59 months. The results suggest that increasing access to, or providing, safe drinking water and flush toilets for households will significantly reduce the high incidence of malnutrition and water-borne diseases among children in Nigeria and should be a high priority for the government.
A Market for Environmentally Responsible Investment?
RFF Discussion Paper EfD 11-01 | January 2011
The authors analyze the South African investment industry and the likelihood that environmental risks will be included in investment decision processes. Based on an empirical qualitative survey of 22 investment organizations (all signatories to the United Nations’ Principles for Responsible Investment), it describes tension between social developmental and environmental goals as a major political obstacle and highlights the need to legislate standardized environmental disclosure by corporations and the need for institutional investors to make long-term commitments to responsible investment philosophies.
Does Eco-Certification Have Environmental Benefits?
Allen Blackman and Maria A. Naranjo
RFF Discussion Paper EfD 10-25 | November 2010
Eco-certification of coffee, timber, and other high-value agricultural commodities is increasingly widespread. In principle, it can improve commodity producers’ environmental performance, even in countries where state regulation is weak. However, evidence needed to evaluate this hypothesis is virtually nonexistent. To help fill this gap, the authors use detailed farm-level data to analyze the environmental impacts of organic coffee certification in central Costa Rica. They find that organic certification improves coffee growers’ environmental performance as well as significantly reduces chemical input use and increases adoption of some environmentally friendly management practices.
The Truth, the Whole Truth, and Nothing but the Truth: A Multiple-Country Test of an Oath Script
Fredrik Carlsson, Mitesh Kataria, Alan Krupnick, Elina Lampi, Åsa Löfgren, Ping Qin, Thomas Sterner, and Susie Chung
RFF Discussion Paper EfD 10-24 | November 2010
In the authors’ study of climate change and emissions reductions, they investigated the effect of an oath script in a contingent valuation survey in Sweden and China. Their results indicate that an oath script has significant effects on respondent behavior in answering willingness-to-pay (WTP) questions, some of which vary by country and by respondent group.
The Role of Land Certification in Reducing Gender Gaps in Productivity in Rural Ethiopia
Mintewab Bezabih and Stein Holden
RFF Discussion Paper EfD 10-23 | November 2010
The importance of secure land rights to smallholder farmers in developing countries is widely recognized. The authors analyze whether land certification boosts productivity of female-headed households in Ethiopia, which are systematically more tenure insecure than male counterparts. In parametric and semi-parametric analyses, the impact of certification on plot-level productivity is positive and significant, but has different impacts on productivity: male-headed households gain significantly, female-headed households only modestly. So, certification does indeed increase farm productivity, but does not necessarily help women.
|Urban Energy Transition and Technology Adoption: The Case of Tigrai, Northern Ethiopia |
Zenebe Gebreegziabher, Alemu Mekonnen, Menale Kassie, and Gunnar Köhlin
RFF Discussion Paper EfD 10-22 | August 2010
Dependency of urban Ethiopian households on rural areas for about 85 percent of their fuel needs is a significant cause of deforestation and forest degradation, resulting in growing fuel scarcity and higher firewood prices. One response to reducing the pressure on rural lands is for urban households to switch fuel sources (from fuelwood to electricity, for example) to slow deforestation and forest degradation and reduce indoor air pollution. However, such an energy transition is conditioned on the adoption of appropriate cooking appliances or stove technologies by the majority of users. This paper investigates urban energy transition and technology adoption conditions using a dataset of 350 urban households in Tigrai, in northern Ethiopia. Results suggest that the transition to electricity is affected by households adopting the electric mitad cooking appliance, which in turn is influenced by the level of education and income, among other things.
Participation in Off-Farm Employment, Rainfall Patterns, and Rate of Time Preferences: The Case of Ethiopia
Mintewab Bezabih, Zenebe Gebreegziabher, Liyousew GebreMedhin, and Gunnar Köhlin
RFF Discussion Paper EfD 10-21 | August 2010
Devoting time to off-farm activities, while complementing agricultural incomes, may be constrained by labor availability and financial capacity. This paper assesses the importance of rainfall patterns, which condition the availability of agricultural labor, and financial constraints on off-farm employment decisions. Using panel data from Ethiopia, which include experimental rate-of-time preference measures, we found that these and rainfall are significant determinants off-farm employment. Rural development policies should take into account the financial capacity of households and the role of offfarm opportunities as safety nets in the face of weather uncertainty.
Urban Fuel Demand in Ethiopia: An Almost-Ideal Demand System Approach
Zenebe Gebreegziabher, Arie J. Oskam, and Demeke Bayou
RFF Discussion Paper EfD 10-20 | August 2010
This paper investigates the opportunities for reducing the pressure of urban centers on rural forest areas, using a dataset of 350 urban households in Tigrai in northern Ethiopia. We applied an almost-ideal demand system to fuels. Because the same fuels were not always used by households, the analysis started with a probit model of fuel use. The inverse Mills ratios derived from it were inserted into the estimation of the fuel demand system to obtain a full set of price and income elasticities. The results suggest that reducing the pressure of urban centers on local forests cannot be seen in isolation from broader development policies aimed at raising the level of education and income of the population. Higher income also stimulates the demand for fuel.
Risk Preferences as Determinants of Soil Conservation Decisions in Ethiopia
Hailemariam Teklewold and Gunnar Köhlin
RFF Discussion Paper EfD 10-19 | August 2010
Soil degradation is one of the most serious environmental problems in the highlands of Ethiopia. The prevalence of traditional agricultural land use and the absence of appropriate resource management often result in the degradation of natural soil fertility. This has important implications for soil productivity, household food security, and poverty. Given the extreme vulnerability of farmers in this area, we hypothesized that farmers’ risk preferences might affect the sustainability of resource use. This study presents experimental results on the willingness of farmers to take risks and relates the subjective risk preferences to actual soil conservation decisions. The study looks at a random sample of 143 households with 597 farming plots. We found that a high degree of risk aversion significantly decreases the probability of adopting soil conservation. This implies that reducing farmers’ risk exposure could promote soil conservation practices and thus more sustainable natural resource management. This might be achieved by improving tenure security, promoting access to extension services and education, and developing off-farm activities that generate income.
Environmental Goods Collection and Children’s Schooling: Evidence from Kenya
Simon Wagura Ndiritu and Wilfred Nyangena
RFF Discussion Paper EfD 10-18 | August 2010
This paper presents an empirical study of schooling attendance and collection of environmental resources using cross-sectional data from the Kiambu District of Kenya. Because the decision to collect environmental resources and attend school is jointly determined, we used a bivariate probit method to model the decisions. In addition, we corrected for the possible endogeneity of resource collection work in the school attendance equation by using instrumental variable probit estimation. One of the key findings is that being involved in resource collection reduces the likelihood of a child attending school. The result supports the hypothesis of a negative relationship between children working to collect resources and the likelihood that they will attend school. The results further show that a child’s mother’s involvement in resource collection increases school attendance. In addition, there is no school attendance discrimination against girls, but they are overburdened by resource collection work. The study recommends immediate policy interventions focusing on the provision of public amenities, such as water and fuelwood.
Responsible Investment: A Vehicle for Environmentally Sustainable Economic Growth in South Africa?
Stéphanie Giamporcaro, Lise Pretorius, and Martine Visser
RFF Discussion Paper EfD 10-17 | June 2010
The authors explore whether any investment products or strategies in South Africa take environmental sustainability into account. By looking at how environmental, social, and governance (ESG) criteria are used in investment decisionmaking, we found that most socially-responsible investment products and responsible investment strategies focus on infrastructure, development, and black economic empowerment. Environmental criteria do not yet receive comparable attention from South African asset managers and owners. Mainstreaming responsible investment principles will need to come from an increase in demand by asset owners or from company positions on ESG issues.
Don’t Tell Me What to Do, Tell Me Who to Follow!: Field Experiment Evidence on Voluntary Donations
Francisco Alpízar and Peter Martinsson
RFF Discussion Paper EfD 10-16 | June 2010
The authors conducted a field experiment on voluntary donations to explore the effects of conformity to a social reference versus a comparable, but imposed, suggested donation. Treatment 1 (conformity to a social reference) saw a significant increase in people donating and an increase in the average conditional and sample donations as the reference increased. We also observed an inflection point. Treatment 2 (donation amount suggested) showed more people donating, but had lower conditional donations. We concluded that people use their peers as a reference to conform to, but partially reject an imposed suggestion on how to behave.
Estimation of the Water Quality Amelioration Value of Wetlands: A Case Study of the Western Cape, South Africa
Jane Turpie, Elizabeth Day, Vere Ross-Gillespie, and Anton Louw
RFF Discussion Paper EfD 10-15 | June 2010
The authors estimated the water treatment capacity of wetlands and its economic value on a landscape scale in the southwestern cape of South Africa. They collected samples at the outflow points of 100 subcatchment areas and measured the loads of nitrogen, dissolved phosphorus, and suspended solids, noting significant reduction of nitrates, nitrites, and ammonium (but not dissolved phosphorus or suspended solids). This suggests an average value of wetlands’ water treatment service to be high enough to compete with alternative land uses and that wetlands should receive more attention in land-use planning and regulation.
Climate Change, Total Factor Productivity, and the Tanzanian Economy: A Computable General Equilibrium Analysis
Mintewab Bezabih, Muyeye Chambwera, and Jesper Stage
RFF Discussion Paper EfD 10-14 | June 2010
The authors analyze the economic impacts of climate change-induced adjustments on the Tanzanian economy, using a countrywide CGE model. Their simulation results indicate that, despite projected reductions in agricultural productivity, negative impacts can potentially be limited because the time scale and low economic starting point leave ample space for factor substitutability and increased overall productivity. Policies that give farmers opportunity to invest in autonomous climate adaptations, plus policies that improve overall economic performance, can be as important as direct government policies for climate adaptation.
Behavioral Response to Plastic Bag Legislation in Botswana
Johane Dikgang and Martine Visser
RFF Discussion Paper EfD 10-13 | May 2010
The authors investigated the use of charges and standards in dealing with plastic litter from shopping bags in Botswana after the country began taxing plastic bags to curb demand. Interestingly, the 2006 legislation did not force retailers to charge for plastic bags, which they did voluntarily at different prices. By analyzing consumers’ sensitivity to the improvement of the plastic bag and price (levy plus retailer charge) for the bags, the authors assessed environmental effectiveness and efficiency of the legislation. The levy led to a significant decline in plastic bag consumption due to constantly high prices of the bags.
Paying for Mitigation: A Multiple Country Study
Fredrik Carlsson, Mitesh Kataria, Alan J. Krupnick, Elina Lampi, Åsa Löfgren, Ping Qin, Susie Chung, and Thomas Sterner
RFF Discussion Paper EfD 10-12 | May 2010
Unique survey data from a contingent valuation study conducted in three different countries (China, Sweden, and the United States) were used to investigate the ordinary citizen’s willingness to pay (WTP) for reducing CO2 emissions. A large majority of respondents in all three countries believe that mean global temperature has increased and humans are responsible. Sweden had the highest WTP for CO2 reductions and China the lowest, despite similar attitudes toward climate change. When WTP is measured as a share of household income, WTP is the same for Americans and Chinese, and higher for Swedes.
Adoption and Impact of Improved Groundnut Varieties on Rural Poverty: Evidence from Rural Uganda
Menale Kassie, Bekele Shiferaw, and Geoffrey Muricho
RFF Discussion Paper EfD 10-11 | May 2010
The authors evaluated the ex-post impact of adopting improved groundnut varieties on crop income and poverty in rural Uganda, utilizing cross-sectional farm-household data collected in 2006 in seven districts. They estimated the average adoption premium using propensity score matching, poverty dominance analysis tests, and a linear regression model to check robustness. They computed income-based poverty measures and investigated their sensitivity to different poverty lines. Adoption of improved groundnut technologies has a significant positive impact on crop income and poverty reduction. These results are not sensitive to unobserved selection bias.
The Evidence Base for Environmental and Socioeconomic Impacts of “Sustainable” Certification
Allen Blackman and Jorge Rivera
RFF Discussion Paper EfD 10-10 | March 2010
Initiatives certifying that farms and firms adhere to predefined environmental and social welfare production standards are increasingly popular. According to proponents, they create financial incentives for farms and firms to improve their environmental and socioeconomic performance. This paper reviews the evidence on whether sustainable certification of agricultural commodities and tourism operations actually has such benefits. We conclude that empirical evidence that sustainable certification has significant benefits is limited, but can be expanded by incorporating rigorous, independent evaluation into the design and implementation of projects promoting sustainable certification.
|Investments in Land Conservation in the Ethiopian Highlands: A Household Plot-Level Analysis of the Roles of Poverty, Tenure Security, and Market Incentives|
Genanew Bekele and Alemu Mekonnen
RFF Discussion Paper EfD 10-09 | March 2010
This study focuses on poverty, land tenure security, and market access to explore factors that affect Ethiopian households’ decisions at the plot level to invest in land conservation and intensity. Using a double-hurdle model with panel data from a household survey of 6,408 plots, our results suggest that conservation and intensity decisions may be explained by different processes and have mixed effects from poverty-related factors. Conservation adoption is influenced by whether the plot is owner-operated, and intensity is determined by expectation of cultivating the land for five years, land ownership, and plot-to-home distance.
The Poverty Demography Trap in Third World Countries: Empirical Evidence from Tanzania
RFF Discussion Paper EfD 10-08 | March 2010
This study suggests that reducing fertility should be a primary policy variable used in concert with macroeconomic policies and poverty reduction strategies. It empirically verifies the existence of a poverty demography trap by analyzing survey data from two regions in northern Tanzania. The results show that demographic variables (high fertility and number of children ever born) and direct (undernutrition and malnutrition) and indirect (expenditure on food; assets; access to clean water, sanitation facilities, energy, and land) poverty indicators are closely intertwined.
The Bioeconomics of Conservation Agriculture and Soil Carbon Sequestration in Developing Countries
Wisdom Akpalu and Anders Ekbom
RFF Discussion Paper EfD 10-07 | March 2010
Improving soil carbon in developing countries by leaving crop residue on the farm may generate private benefits to farmers and sequester carbon emissions. The authors modeled and developed an expression for an optimum economic incentive. The found through empirical investigation of the determinants of crop residue left on the soil that it depends on the soil’s cation exchange capacity, maize prices, extension officers visiting the plot, household size, education level of the household head, and alternative cost of soil conservation.
Paying the Price of Sweetening Your Donation: Evidence from a Natural Field Experiment
Francisco Alpízar and Peter Martinsson
RFF Discussion Paper EfD 10-06 | February 2010
Using a natural field experiment in a recreational site (a public good almost fully dependent on voluntary donations), the authors explored the crowding-out effect of gift rewards. Receiving a gift in appreciation of a donation had no effect. Interestingly, when the gift was combined with an attempt to trigger reputational and self image motives, the probability of donating decreased significantly, compared to the social reference treatment alone.
Does Relative Position Matter in Poor Societies?: Evidence from a Survey Experiment in Rural Etheopia
Alpaslan Akay, Peter Martinsson and Haileselassie Medhin
RFF Discussion Paper EfD 10-05 | February 2010
The authors investigated attitudes toward positionality among rural farmers in northern Ethiopia, using a tailored two-part survey experiment. On average, they found positional concerns neither in income per se, nor in income from aid projects among the farmers. These results support the claim that positional concerns are correlated with absolute level of income of a country.
Attitudes Toward Uncertainty Among the Poor: Evidence from Rural Ethiopia
Alpaslan Akay, Peter Martinsson, Haileselassie Medhin, and Stefan Trautmann
RFF Discussion Paper EfD 10-04 | February 2010
The authors examined risk and ambiguity attitudes among Ethiopian peasants and compared their attitudes to Western university students, using the same decision task. The Ethiopians showed strong risk aversion and ambiguity aversion, similar to the university students. Testing for socioeconomic variables on uncertainty attitudes revealed that poor health increased both risk and ambiguity aversion. Unlike other studies, they found no gender effect for risk attitude. The results suggest that both risk and ambiguity attitudes are important to economic decisions in poor agricultural societies, and should be considered by policymakers.
Determinants of Performance of Drinking-Water Community Organizations: A Comparative Analysis of Case Studies in Rural Costa Rica
Róger Madrigal, Francisco Alpízar, and Achim Schlüter
RFF Discussion Paper EfD 10-03 | February 2010
The authors examine the performance of community organizations that provide safe drinking water to 60 percent of rural Costa Rica. They uses a qualitative approach and matching techniques to analyze how the complex characteristics of watersheds, delivery, governance, and socioeconomic attributes of local users affect three key dimensions of performance (financial health, water delivery infrastructure, and user satisfaction) in four community organizations. The conditions that promote better performance are a demand-driven approach with local accountability, working rules for tariff collection and infrastructure maintenance, and appropriate support from the government.
Conservation Policies and Labor Markets: Unraveling the Effects of National Parks on Local Wages in
Juan Robalino and Laura Villalobos-Fiatt
RFF Discussion Paper EfD 10-02 | February 2010
Using household surveys with highly disaggregated geographic reference, the authors explored how national parks affect local wages in Costa Rica and how effects on local welfare can be positive or negative in different parks or even within different areas of a park. They found that wages close to parks are higher only when jobs are near tourist entrances. The location of national park entrances and the possibility that agricultural workers can switch to higher-paid service activities near entrances may be important tools for helping local workers take advantage of the economic benefits of protected areas..
Household Tree Planting in Tigrai, Northern Etheopia: Tree Species, Purposes, and Determinants
Zenebe Gebreegziabher, Alemu Mekonnen, Menale Kassie, and Gunnar Köhlin
RFF Discussion Paper EfD 10-01 | January 2010
Trees have both economic and ecological purposes in rural Ethiopia, supplying households with wood products for consumption and sale, and decreasing soil degradation. The authors used cross-sectional household-level data in a sample selection framework that simultaneously took into account whether or not to plant trees and how many, and a logistic regression that analyzed tree attributes contributing to households’ tree-planting decisions. Land size, age, gender, tenure security, education, exogenous income, and agroecology increased the propensity to plant trees and the amount of trees, whereas increased livestock holding impacted both decisions negatively.
To Trade or Not to Trade: Firm-Level Analysis of Emissions Trading in Santiago, Chile
Jessica Coria, Åsa Löfgren, Thomas Sterner
RFF Discussion Paper EfD 09-25 | November 2009
The authors surveyed firms participating in emissions trading programs in Santiago, Chile, to explore further whether tradable permits are appropriate for transition and developing economies. Their survey information revealed serious implementation and design flaws in Chile’s trading, but they are not more severe than the EU or U.S. systems. Countries with similar income levels and institutional maturity as Chile should be able to develop well-functioning permit trading schemes.
Fuel Tax Incidence in Developing Countries: The Case of Costa Rica
Allen Blackman, Rebecca Osakwe, Francisco Alpizar
RFF Discussion Paper EfD 09-24 | October 2009
Although fuel taxes are a practical means of curbing vehicular air pollution, congestion, and accidents in developing countries—all of which are typically major problems—they are often opposed on distributional grounds. Yet few studies have investigated fuel tax incidence in a developing country context. The authors use household survey data and income-outcome coefficients to analyze fuel tax incidence in Costa Rica, concluding that distributional concerns need not rule out using fuel taxes to address pressing public health and safety problems, particularly if gasoline and diesel taxes can be differentiated.>
Climate Change in a Public Goods Game: Investment Decision in Mitigation versus Adaptation
Reviva Hasson, Åsa Löfgren, Martine Visser
RFF Discussion Paper EfD 09-23 | October 2009
The authors studied the potential tradeoff between countries’ investments in mitigation versus adaptation to climate change. Mitigating greenhouse gases may be a public good, but adaptation to climate change is a private good, benefiting only the country or individual. They used a one-shot public-goods game with a stochastic term to account for probabilistic destruction, mapping the probability density function to within-group levels of mitigation, and compared low-vulnerability and high-vulnerability treatments by varying the magnitude of disaster. Results showed no significant difference in mitigation level and emphasized the role of trust in enhancing cooperation.
Production Risk and Farm Technology Adoption in Rain-Fed, Semi-Arid Lands of Kenya
Maurice Juma, Wilfred Nyangena, Mahmud Yesuf
RFF Discussion Paper EfD 09-22 | October 2009
Poor Kenyan farmers in rain-fed, risky environments are reluctant to adopt new technologies with potential production gain because of enormous downside risks. The authors looked at the effects of production risk on farm technology adoption using plot-level data and computed the mean and production risk factors using a moment-based approach and a pseudo-fixed effect probit model to determine the effects of production risk and farm variables on technology adoption decisions. They show that productivity gains are necessary, but not sufficient to attract farmers to adopt new agricultural technologies.
Social Background, Cooperative Behavior, and Norm Enforcement
Martin Kocher, Peter Martinsson, and Martine Visser
RFF Discussion Paper EfD DP 09-21 | October 2009
Studies have shown differences in cooperative behavior across countries and in the use of (and reaction to) a norm enforcement mechanism in cross-cultural studies. The authors present data that prove that stark differences in both dimensions can exist even within the same town. They created a unique data set, based on one-shot public goods experiments in South Africa. Most of the group differences can be explained by variables for social capital and social environment, such as trust or household violence.
Taxes, Permits, and the Adoptation of Abatement Technology under Imperfect Compliance
Clara Villegas and Jessica Coria
RFF Discussion Paper EfD DP 09-20 | October 2009
The authors analyze how price-based and quantity-based emissions regulations affect compliance incentives and social welfare with incomplete enforcement and technology adoption. If the policy level is not adjusted in response to new technology, violations under tradable emissions permits (TEPs)—in contrast to taxes—decrease with the rate of technology adoption. Regarding welfare, ranking the instruments is not so straightforward: taxes may induce lower emissions damages, while TEPs induce lower costs of abatement, investment, and expected enforcement. The overall ranking depends on the extent to which these effects offset each other.
Enforcement of Exogenous Environmental Regulations, Social Disapproval, and Bribery
Wisdom Akpalu, Håkan Eggert, and Godwin K. Vondolia
RFF Discussion Paper EfD DP 09-19 | October 2009
Many resource users are not involved in formulation and enforcement of resource management regulations in developing countries and do not generally accept such rules. Enforcement officers who have social ties to resource users may encounter social disapproval if they enforce regulations zealously, so they may accept bribes to avoid it. The authors present a neoclassical utility maximization framework that characterizes this situation, derive results for situations where officers are passively and actively involved in the bribery, and make some interesting policy recommendations.
Farmers’ Adaptation to Climate Change
Francisco Alpízar, Fredrik Carlsson, Maria Naranjo
RFF Discussion Paper EfD DP 09-18 | September 2009
The risk of losing income and productive means to adverse weather can differ significantly among farmers and is hard to estimate empirically. Moreover, the costs associated with climate adaptation investments can exhibit economies of scope. Using a framed field experiment, we explore the implications of these characteristics on Costa Rican coffee farmers’ decisions to adapt to climate change. Despite a baseline of high risk aversion, farmers frequently chose safe options when faced with unknown risk and largely coordinated their decisions to secure lower adaptation cost.
To Bribe or Not to Bribe: Incentives to Protect Tanzania’s Forests
Elizabeth J.Z. Robinson, Razack B Lokina
RFF Discussion Paper EfD DP 09-17 | September 2009
In forests managed by participatory management in Tanzania, “volunteer” patrollers often enforce access restrictions, receiving a share of collected fine revenue as incentive. The authors explore how shared revenue and alternative sources of forest products for villagers determine the patrollers’ enforcement effort and decision to take bribes rather than report violators. Using an optimal enforcement model, they show that without transparency or funds to pay and monitor these patrollers, policymakers face tradeoffs among efficiency, enforcement effectiveness, and revenue collection.
Conditional Cooperation and Social Group: Experimental Results from Colombia
Peter Martinsson, Clara Villegas-Palacio, Conny Wollbrant
RFF Discussion Paper Efd DP 09-16 | September 2009
There is growing interest in understanding whether behavior is the same across locations. By holding cross- and within-country dimensions constant (in contrast to previous studies on cross-group comparisons of conditional cooperation), the authors investigated cooperative behavior between social groups in the same location. Their results reveal significantly different cooperation behavior, suggesting that different social groups exhibit differences both in terms of composition of types and extent of conditional cooperation.
Farmers' Preferences for Crop Variety Traits: Lessons for On-Farm Conservation and Technology Adoption
EfD 09-15 | July 2009
Sinafikeh Asrat, Mahmud Yesuf, Fredrik Carlsson, and Edilegnaw Wale
Using a choice experiment approach, the authors investigated what governs Ethiopian farmers’ in-situ conservation decisions and crop-variety preferences. Environmental adaptability and yield stability were important attributes, such that farmers were willing to forgo some income or output for them. Household land holdings, livestock assets, farming experience, and extension services were major factors for household heterogeneity of crop-variety preferences. These results have important policy implications for on-farm conservation, breeding priorities, and improved variety adoption in Ethiopia.
Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary
EfD 09-14 | June 2009
In developing countries, weak environmental regulatory institutions often undermine conventional command-and-control policies. As a result, these countries are increasingly experimenting with alternative approaches that aim to leverage nonregulatory “green” pressures applied by local communities, capital markets, and consumers. This article reviews three strands of the empirical literature on this trend.
Risk Implications of Farm Technology Adoption in the Ethiopian Highlands
EfD 09-13 | May 2009
Mahmud Yesuf, Menale Kassie, and Gunnar Köhlin
In developing countries, production and consumption risks play a critical role in the choice and use of production inputs and adoption of new farm technologies. The authors investigated impacts of chemical fertilizer and soil and water conservation technologies adoption on production risks, using a moment-based approach and two years of cross-sectional data. Their results revealed that the impacts of technology adoption on yield variabilty and downside risk vary by technology type. The results underscore the need for complementary policies to hedge downside risks for effective adoptation strategies.
Sustainable Agricultural Practices and Agricultural Productivity in Ethiopia: Does Agroecology Matter?
EfD 09-12 | April 2009
Menale Kassie, Precious Zikhali, John Pender, and Gunnar Köhlin
This paper investigates the impact of sustainable agricultural practices on crop productivity, particularly whether reduced tillage results in more or less productivity gain than chemical fertilizer. The authors' results, using two sets of plot-level data in Ethiopia, revealed clear superiority of reduced tillage over fertilizer in enhancing productivity in the low-rainfall region. In the high-rainfall region, fertilizer is overwhelmingly superior and reduced tillage potentially results in productivity losses. This underscores the need to understand the role of agroecology in determining the profitability of farm technologies.
Impacts of Land Certification on Tenure Security, Investment, and Land Markets: Evidence from Ethiopia
EfD 09-11 | April 2009
Klaus Deininger, Daniel Ayalew Ali, and Tekie Alemu
Using a difference-in-difference approach, this paper assesses the effects on investment of a low-cost land registration program in Ethiopia, which covered some 20 million plots over five years. Despite policy constraints, the program increased land-related investment and yielded benefits significantly above the cost of implementation.
Changing Access to Forest Resources in Tanzania
EfD 09-10 | April 2009
Elizabeth J.Z. Robinson and George C. Kajembe
This is an empirical exploration of villagers’ dependence on non-timber forest products in the Morogoro region in Tanzania, the decision rules used concerning where and how much they collect, how collection changes with forest degradation, and the implications of more restrictive access from participatory forest management. Villagers’ responses to increased degradation vary by forest product; some collection tends to be displaced to other forests, less of the resources are collected, and collection times increase considerably.
Benefits of Organic Agriculture as a Climate Change Adaptation and Mitigation Strategy for Developing Countries
EfD 09-09 | April 2009
Organic agriculture (OA) is a concrete and promising strategy for adaptation to climate change and variability for rural communities has additional potential as a mitigation strategy. OA is a sustainable livelihood strategy with decades of use in several climate zones and widely variable local conditions. Its financial requirements for adaptation or mitigation are low. Further research is needed on yields from OA and its mitigation and sequestration potential. Other critical aspects to consider are information provision and institutional structures.
Optimal Enforcement and Practical Issues of Resource Protection in Developing Countries
EfD 09-08 | March 2009
Elizabeth J.Z. Robinson, Ajay Kumar Mahaputra, and Heidi J. Albers
This paper relates principle findings in the optimal economic enforcement literature to practical issues of enforcing and managing forest and wildlife access restrictions in developing countries. The authors identified large gaps in the theoretical literature that limit its usefulness for practical management, particularly regarding limited funding and cost recovery, multiple layers of enforcement, different incentives faced by enforcers, and conflict between protected-area managers’ job requirements and rural people’s needs.
Spatial Aspects of Forest Management and Non-Timber Forest Product Extraction in Tanzania
EfD 09-07 | March 2009
Elizabeth J.Z. Robinson and Razack B. Lokina
The authors explore the impact of participatory forest management (PFM) in Tanzania that excludes villagers from traditional access to forests to collect non-timber forest products (NTFPs). Using fieldwork and a spatial-temporal model, they focused on forest degradation and regeneration and villagers’ utility before and after PFM has been introduced. Although the PFM forest improves, they found that a moratorium on NTFP collection often adversely affects villagers’ livelihoods and more distant, less-protected forests.
Unintended Impacts of Multiple Instruments on Technology Adoption
EfD 09-06 | March 2009
This paper analyzes unintended impacts of the interaction of multiple environmental policy instruments, specifically, the effects of tradable permits and seasonal direct regulations on adoption rates of advanced abatement technologies. When environmental emergencies are exogenous, mixing direct regulations with tradable permits induces an inefficient rate of adoption, while tradable permits maximize social welfare. If endogenous, then tradable permits and emissions standards could eventually offer a higher level of social welfare.
Impacts of the Productive Safety Net Program in Ethiopia on Livestock and Tree Holdings of Rural Households
EfD 09-05 | March 2009
Camilla Andersson, Alemu Mekonnen, Jesper Stage
We evaluated the impacts of the Ethiopian Productive Safety Net Program (PSNP) on rural households’ holdings of livestock and forest assets including trees, applying both regression analysis and propensity score matching to panel data. We found no indication that participation in PSNP induces asset disinvestment; rather, households increased tree holdings, but not livestock. Shocks appear to lead households to disinvest in livestock, but not trees. Results suggested increased forestry activity with PSNP participation and that credit access positively impacted livestock holdings.
The Design, Compilation, and Interpretation of Satellite Accounts for South Africa’s Fisheries: Some Critical Thoughts
EfD DP 09-04 | March 2009
Anthony Leiman, Timothy Harris
Using South Africa’s hake and rock lobster fisheries, the authors argue the need for satellite accounts of South Africa’s commercial fisheries. They stress the policy role of satellite accounts where access to fish stocks is contested, value of better information on stock depletion, past and present excessive fishing effort, returns-to-effort reduction, harvest resource rents, and value of the resource stock. The United Nation’s SEEAF can help construct physical accounts (with caveats) and by extension monetary accounts, but the current guidelines embody flaws that can yield anomalous results.
User Financing in a National Payments for Environmental Services Program: Costa Rican Hydropower
EfD DP 09-03-REV | February 2009
Allen Blackman and Richard T. Woodward
National government-funded payments for environmental services (PES) programs often lack sustainable financing and fail to target payments to providers of important environmental services. In principle, these problems can be mitigated by supplementing government financing with contributions from leading environmental service users. The authors use original survey data and official statistics to analyze user financing in Costa Rica’s renowned national PES program, focusing on the amounts and sources of user financing, the drivers of contributions, and contributors’ perceptions of the PES program.
Effects of Global Fisheries on Developing Countries: Possibilities for Income and Threat of Depletion
EfD DP 09-02 | January 2009
Håkan Eggert and Mads Greaker
Fisheries in developing countries are often characterized by poorly defined property rights, open access, and overcapitalization. The authors explore how trade liberalization generally is beneficial, but combining it with open access may reduce a country’s welfare and fish stocks, especially when reinforced by bad subsidies. Trade liberalization may also promote development of property rights in response to increased fish exploitation. The WTO can help facilitate trade by reclassifying subsidies to eliminate bad ones and distinguish good ones.
Adoption of Organic Farming Techniques: Evidence from a Semi-Arid Region of Ethiopia
EfD DP 09-01 | January 2009
Menale Kassie, Precious Zikhali, Kebede Manjur, and Sue Edwards
Poor farmers need sustainable agriculture that relies on renewable local resources, such as conservation tillage and compost. This study looked at factors influencing decisions to adopt these two practices, using multinomial logit analysis of plot and household characteristics. We found that poverty and access to information affected choice of farming practices. The impact of gender on technology adoption was technology specific, and plot characteristics showed that adopting particular technologies was location specific. Our stochastic dominance analysis indicated that sustainable farming practices enhance productivity, even more than chemical fertilizers.
Agroforestry Price Supports as a Conservation Tool: Mexican Shade Coffee
EfD DP 08-36-REV | December 2008
Beatriz Ávalos-Sartorio and Allen Blackman
Economic policies that boost profits from agroforesty, thereby creating financial incentives for land managers to favor these systems over less environmentally friendly land uses, could, in theory, have ancillary environmental benefits. This paper analyzes primary and secondary data to determine whether a voluntary price support program for Mexican coffee—mostly grown in shaded systems that supply important ecosystem services—has had such “win-win” benefits by stemming land-use change in the coffee sector.
Forestland Reform in China: What do the Farmers Want? A Choice Experiment on Farmers' Property Rights Preferences
EfD DP 08-35 | December 2008
With decentralization experiments occurring in the Chinese forestry sector, the authors used a survey-based choice experiment to investigate farmers’ preferences for various property-rights attributes of a forestland contract. Farmers are highly concerned with what rights a contract provides. Reducing the risk of contract termination and introducing a priority right to renew a contract significantly increase farmers’ marginal willingness to pay (WTP) for a forest contract. Farmers are also concerned with tenure length and waiting time to harvest. In one region, the annual WTP for a 50-year contract is higher than a 25-year contract.
Tradable Permits in Developing Countries: Evidence from Air Pollution in Santiago, Chile
EfD DP 08-34 | December 2008
Jessica Coria and Thomas Sterner
Santiago was one of the first cities outside the OECD to implement a tradable permit program to control air pollution. This paper looks closely at the program’s performance over the past 10 years, stressing its similarities and discrepancies with trading programs in developed countries, and analyzing how it has reacted to regulatory adjustments and market shocks. Studying Santiago’s experience allows us to discuss the drawbacks and advantages of applying tradable permits in less developed countries.
It Is Better to Be the Head of a Chicken than the Tail of a Phoenix? A Study of Concern for Relative Standing in Rural China
EfD DP 08-33 | November 2008
Fredrik Carlsson and Ping Qin
The authors discuss a survey-experiment method, measuring to what extent poor Chinese farmers care about their relative income. They find that the respondents cared to a high degree. Compared to studies in developed countries, concern for relative standing seems to be equally strong among rural households in China. This should be seen in the light of the rapid change China has undergone over the past 30-plus years. Thus, the rural population, which is lagging behind, suffers not only from low absolute income but also from low relative income.
Estimating Returns to Soil and Water Conservation Investments: An Application to Crop Yeild in Kenya
EfD DP 08-32 | October 2008
Wilfred Nyangena and Gunnar Kohlin
The authors investigated the impact of soil and water conservation (SWC) investment on farm productivity in Kenya. They focused on plots with and without SWC, testing whether increased SWC is beneficial for yield and affects input levels, input returns, and crop characteristics. The mixed results showed that plots without SWC have higher yield values, although plots with SWC are significantly steeper and more eroded. A two-stage random effects switching regression estimation indicated that SWC increased returns from degraded plots and other inputs. A simulation exercise showed that adoption has been beneficial to plots with SWC and would be beneficial for plots without it.
Does Relative Income Matter for the Very Poor?: Evidence from Rural Ethiopia
EfD DP 08-31 | October 2008
Alpaslan Akay and Peter Martinsson
Does relative income have an impact on subjective well-being among extremely poor people? Contrary to the findings in developed countries, where relative income has shown a significant and negative impact on subjective well-being, this study (based on different definitions of reference groups) suggests that relative income does not affect subjective well-being among the very poor people in northern Ethiopia.
Fast Track Land Reform and Agricultural Productivity in Zimbabwe
EfD DP 08-30 | October 2008
The author investigated the Zimbabwean Fast Track Land Reform Program’s (FTLRP) impact on the agricultural productivity of its beneficiaries. The data revealed significant differences between beneficiaries and a control group of communal farmers in household and parcel characteristics and input usage. The results suggest that FTLRP beneficiaries are more productive due to greater use of inputs. Results also confirmed the constraints imposed on agricultural productivity by poverty, suggesting that policies aimed at alleviating poverty will have a positive impact on agricultural productivity.
Is There a Link between Common Property Forest Management and Private Tree Growing? Evidence of Behavioral Effects from Highland Ethiopia
EfD DP 08-29 | October 2008
Alemu Mekonnen and Randall Bluffstone
This paper analyzes the correlates of aggregated and disaggregated indices of common property forest management (CPFM) and the relationship between CPFM and the decision to grow trees and the number of trees grown in the Amhara region of Ethiopia. There was considerable variation across households, but the average CPFM, institutional characteristics, and management tools indices suggested low levels of management. There also were significant differences in management of community forests across sites (driven by population size, population density, and forest size). A strong correlation between the different CPFM indices suggested that households perceived CPFM components as similar and thus indistinguishable.
Environmental Policy, Fuel Prices, and the Switch to Natural Gas in Santiago, Chile
EfD DP 08-28 | October 2008
The author analyzes the role of environmental policies and energy cost savings in the switch to natural gas by stationary sources in Chile. There is skepticism about using market-based policies (economic instruments) in the developing world—permit trading programs versus emissions fees. This paper produces new evidence of the role of environmental regulations and market forces in a successful air-quality improvement program in Chile, a less-developed country. According to the study’s data, most of the switching was induced by the lower cost of natural gas, although environmental policies played a small role and showed that sources were more sensitive to the cost of energy than to environmental regulation.
Does Disclosure Reduce Pollution? Evidence from India’s Green Rating Project
EfD DP 08-27 | October 2008
Nicholas Powers , Allen Blackman, Thomas P. Lyon, and Urvashi Narain
Public disclosure programs that collect and disseminate information about firms’ environmental performance are increasingly popular in both developed and developing countries. Yet little is known about whether they actually improve environmental performance, particularly in the latter setting. The authors use detailed plant-level survey data to evaluate the impact of India’s Green Rating Project (GRP) on the environmental performance of the country’s largest pulp and paper plants.
Taxes, Permits, and the Diffusions of a New Technology
EfD DP 08-26 | October 2008
The author looks at the effects of the choice between taxes and permits on the pattern of adoption of a new emissions abatement technology. The regulator determines the optimal ex-post amount of emissions before firms start to adopt the technology. Each firm decides when to adopt, considering benefits, costs, and advantage gained over their rivals, producing a sequence of adoption that is “diffused” into the industry over time. The study shows that when output demand is elastic, auctioned permits induce an earlier diffusion than taxes and thus provide the largest benefit to social welfare.
Land Cover Change in Mixed Agroforestry: Shade Coffee in El Salvador
EfD DP 08-25 | September 2008
Allen Blackman, Beatriz Ávalos-Sartorio, and Jeffrey Chow
Little is known about land cover change in mixed agroforestry systems, which often supply valuable ecological services. The authors use a spatial regression model to analyze clearing in El Salvador’s shade coffee–growing regions during the 1990s. Their findings buttress previous research suggesting the relationship between proximity to cities and clearing in mixed agroforestry systems is the opposite of that in natural forests. But this result, and several others, depends critically on the characteristics of the growing area, particularly the dominant cleared land use. These findings imply that policies aimed at retaining mixed agroforestry need to be carefully targeted and tailored.
Deforestation Impacts of Environmental Services Payments: Costa Rica’s PSA Program 2000–2005
EfD DP 08-24 | August 2008
Juan Robalino, Alex Pfaff, Artur Sánchez-Azofeifa, Francisco Alpízar, Carlos León, and Carlos Rodríguez
The authors estimated the deforestation impact of Costa Rica’s pioneering environmental services payments program (Pagos por Servicios Ambientales, or PSA) between 2000 and 2005. Despite finding that less than 1 in 100 of enrolled land parcels would have been deforested annually without payments, the program’s potential for impact was increased by explicitly targeting areas with deforestation pressure and increasing some payments to enroll land that would have been cleared.
Fast Track Land Reform, Tenure Security, and Investments in Zimbabwe
EfD DP 08-23 | June 2008
There is evidence that the Fast Track Land Reform Program created insecurity among its beneficiaries and adversely impacted investments in soil conservation. However, households in the study that believed investing in land enhanced tenure security invested significantly more in soil conservation measures than other households.
Soil Conservation and Small-Scale Food Production in Highland Ethiopia: A Stochastic Metafrontier Approach
EfD DP 08-22 | June 2008
Haileselassie A Medhin, Gunnar Kohlin
This study used the newly developed metafrontier approach to assess the technical efficiency of small-scale food production in the Ethiopian highlands at plot level, in order to investigate the role of soil conservation technology in enhancing agricultural productivity. Stochastic frontier estimations showed that plots with soil and water conservation technologies are relatively more efficient than plots without soil conservation. Studying the aspects in which a given soil and water conservation technology affects efficiency could shed light on why laboratory-effective conservation technologies underperform in the real world.
Determinants of Soil Capital
EfD DP 08-21 | June 2008
Explaining soil capital facilitates a better understanding of constraints and opportunities for increased agricultural production and reduced land degradation. The diversity in farmers’ soil capital, production strategies, and general farming systems (including conservation investments) points to the value of internalizing these aspects in the formulation of the government’s policies and extension advice on sustainable agriculture.
Production Function Analysis of Soil Properties and Soil Conservation Investments in Tropical Agriculture
EfD DP 08-20 | June 2008
Anders Ekbom and Thomas Sterner
This paper integrates traditional economic variables, soil properties, and variables on soil conservation technologies to estimate agricultural output among small-scale farmers in Kenya’s central highlands. The study finds that integrating traditional economics and soil science is invaluable, especially as omitting measures of soil capital can cause omitted-variable bias. The central policy implication is that while fertilizers are generally beneficial, their application is a complex art, and more is not necessarily better.
Trade, GMOs, and Environmental Risk: Are Policies Likely to Improve Welfare?
EfD DP 08-19 | August 2008
Hakan Eggert and Mads Greaker
Controversy over the EU import ban on food from genetically modified organisms (GMOs) forced the EU to change course and institute a mandatory labeling scheme. This study first examined how different policies for the production and use of GMOs might influence the market outcome in consumer food markets. Second, it evaluated the welfare effects of the policy measures, finding that mandatory labeling often increases both domestic welfare and global welfare, while trade bans more likely decrease global welfare.
Determinants of Household Fuel Choice in Major Cities in Ethiopia
EfD DP 08-18 | August 2008
Alemu Mekonnen, Gunnar Kohlin
This paper examines the multiple fuel choices of urban households in major Ethiopian cities, using panel data collected in 2000 and 2004. The results suggest that as urban and rural households’ total expenditures rise, they use more types of fuels (including wood) and spend more on the fuels consumed. The results also support arguments that multiple fuel use better describes the fuel-choices of households in developing countries, as opposed to the idea that households switch to more expensive but cleaner fuels as incomes rise.
Biomass Fuel Consumption and Dung Use as Manure: Evidence from Rural Households in the Amhara Region of Ethiopia
EfD DP 08-17 | April 2008
Alemu Mekonnen, Gunnar Kohlin
Fertilizer use (including dung) in Ethiopia is low, particularly in the northern highlands, where dung is a significant source of household fuel. This study examined the determinants of (1) rural households’ decision to use dung as fuel and as manure, and (2) consumption of woody biomass and dung as household fuel sources. Using dung as fuel and manure was influenced by household assets and characteristics, type of stove, and distance to towns, suggesting the important role of asset, product, and labor market imperfections. The study found indications that woody biomass and dung were complements as household fuel, suggesting the need to focus on asset-poor households to increase use of manure, more efficient stoves, and other energy sources.
Wealth and Time Preference in Rural Ethiopia
EfD DP 08-16 | June 2008
Mahmud Yesuf and Randy Bluffstone
This study measured the discount rates of 262 farm households in the Ethiopian highlands, using a time preference experiment with real payoffs. In general, the median discount rate was very high and varied systematically with wealth and risk aversion. Our findings, however, warn that rates-of-time preferences (RTPs) and risk aversion reinforce each other and are easily confused. Because the RTPs were so high, what seem like profitable investments from the outside might not seem so from the farmers’ perspectives.
The Role of Production Risk in Sustainable Land-Management Technology Adoption in the Ethiopian Highlands
EfD DP 08-15 | June 2008
Menale Kassie, Mahmud Yesuf, and Gunnar Köhlin
The empirical analysis in this paper shows that production risk plays a significant role in sustainable land-management technology adoption in the Ethiopian highlands. The adoption and intensity decreased for farmers who experienced higher variance of return and downside risk exposure (skewness), and increased for farmers who experienced higher expected return. These findings could help decisionmakers design economic instruments that can hedge against variability of return (as measured by variance) and crop failure, and increase expected return to promote sustainable land-management technologies.
Regulatory Compliance in Lake Victoria Fisheries
EfD DP 08-14 | June 2008
Håkan Eggert, Razack B Lokina
This analysis of the fishers’ compliance with regulations in Lake Victoria, Tanzania, gives support to the traditional economics-of-crime model and shows that the extension of the basic deterrence model can lead to a richer model with substantially higher explanatory power. It focused on mesh-size regulation to explore potential reasons for following the rules (or not), such as being moral and doing the right thing; obeying the rules due to peer pressure from other fishers; perceiving the regulation as legitimate; and perceiving that they (the fishers) have been involved in the regulation process.
Technical Efficiency and the Role of Skipper Skill in Artisanal Lake Victoria Fisheries
EfD DP 08-13 | April 2008
Razack B. Lokina
This paper studies technical efficiency and skipper skill (and explores potential proxies), using Tanzanian fishery data for the two major species, Nile perch and dagaa. The relative level of efficiency is high in both fisheries, and several observable variables linked to skipper skill significantly explain the efficiency level. However, given the rapidly depleting fish stocks in Lake Victoria, increased efficiency at the aggregate level is only possible if fishing effort is limited.
What Kinds of Firms Are More Sensitive to Public Disclosure Programs for Pollution Control?: The Case of Indonesia's PROPER Program
EfD DP 08-12 | March 2008
Jorge H. García, Shakeb Afsah, and Thomas Sterner
Analysis of the differences in firms' responsiveness to PROPER (Indonesia's successful public disclosure program for industrial pollution control) showed that foreign-owned firms and firms in densely populated areas were more likely to respond to public environmental ratings. Firms with bad environmental performances felt pressure to improve, but this incentive diminished after the initial abatement steps.
Economic Growth and the Natural Environment: The Example of China and Its Forests since 1978
EfD DP 08-11 | April 2008
William F. Hyde, Wei Jiegen, Jintao Xu
China’s rapid growth and forest data show interesting macroeconomic and population impacts on the forest. It makes a theoretical argument for separating forests into managed and natural forests, administered by state or private agents. The paper’s regressions suggest that declining rural populations accompany forest recovery and that natural forest is drawn down as incomes rise, and recovers when incomes rise. As incomes increase futher, the managed forest grows more rapidly, offseting any draw on the natural forest, with an aggregate net expansion for managed and natural forests combined. The question arises whether other forests across the globe would show these results if comparable forest data were available.
Co-benefits of Greenhouse Gas Mitigation Policies in China: An Integrated Top-Down and Bottom-Up Modeling Analysis
EfD DP 08-10 | May 2008
Jing Cao, Mun Ho, Dale W. Jorgenson
This paper describes an integrated modeling approach to combine a top-down, recursive CGE model with a bottom-up, electricity-sector model to simulate two categories of policies: 1) assessment of three national-level environmental tax policies (carbon tax, fuel tax, and output tax), and 2) analysis of several mixed national policies with sectoral-level non-price emission caps. The potential co-benefits for China are significant. In addition, the fuel tax or carbon tax, combined with a sector-specific carbon-emission cap policy would be the most effective in terms of the joint objectives on carbon abatement, health co-benefits, and induced technology change.
Economics of Soil Conservation Adoption in High-Rainfall Areas of the Ethiopian Highlands
EfD DP 08-09 | March 2008
Menale Kassie, Stein Holden, Gunnar Köhlin, and Randy Bluffstone
Measuring and analyzing the impact of of trench terraces, called fanya juu bunds, on the value of crop production in Ethiopian highlands with high rainfall had the surprising conclusion that this technology reduced soil erosion and off-site effects at the expense of lower value of crop production and, hence, poor Ethiopian farmers.
The Role of Soil Conservation on Mean Crop Yield and Variance of Yield: Evidence from the Ethiopian Highlands
EfD DP 08-08 | March 2008
Menale Kassie, John Pender, Mahmud Yesuf, Gunnar Köhlin, and Elias Mulugeta
Stone bunds in the Ethiopian highlands showed statistically significant and positive impact on yield in low-rainfall areas, but not in high-rainfall areas, and they did not have a statistically significant impact on production risk in either area. Stone bund performance varied by agro-ecology type, which implies the need for appropriate technologies that enhance productivity and are better adapted to local conditions.
Rural Livelihoods, Poverty, and the Millennium Development Goals: Evidence from Ethiopian Survey Data
EfD DP 08-07 | June 2008
Randall Bluffstone, Mahmud Yesuf, Bilisuma Bushie, and Demessie Damite
This in-depth look at key development issues facing Ethiopian households in context of the Millenium Development Goals uses survey data from 2000, 2002, and 2005. Ethiopia is making progress, but household incomes are shockingly low and hugely varied. Assets could potentially help smooth consumption, but the current property rights structure (land is owned by the government) excessively limits households’ options and cannot serve as a true, functioning asset.
Do Discount Rates Change over Time?: Experimental Evidence from Ethiopia
EfD DP 08-06 | March 2008
Heather Klemick and Mahmud Yesuf
This artefactual experiment in Ethiopia tested the hyperbolic discounting hypothesis by comparing time discounting over cash and consumption goods, using real payoffs. It found no difference in elicited time preferences between cash and consumption goods (tradable or final), which could be the result of missing markets in rural Ethiopia, and there was some evidence of time-inconsistent preferences.
Lake Victoria Fish Stocks and the Effects of Water Hyacinths on the Catchability of Fish
EfD DP 08-05 | March 2008
Eseza Kateregga, Thomas Sterner
This study of the deleterious effect on fishing by the water hyacinth invasion of Lake Victoria found an unusual positive: the decline of fish catchability caused by the the abundance of water hyacinths has paradoxically stopped or at least postponed serious overfishing.
Market Imperfections and Farm Technology Adoption Decisions A Case Study from the Highlands of Ethiopia
EfD DP 08-04 | March 2008
Mahmud Yesuf and Gunnar Köhlin
This examination of the impacts of market and institutional imperfections on technology adoption found that Ethiopian farmers' decisions to adopt fertilizer significantly and negatively depended on whether they also adopted soil conservation, but not vice versa. Market imperfections were significant factors in explaining variations in decisions to adopt farm technology, such that relieving market imperfections could increase adoption of farm technologies.
Anonymity, Reciprocity, and Conformity: Evidence from Voluntary Contributions to a National Park in Costa Rica
EfD DP 08-03 | March 2008
Francisco Alpizar, Fredrik Carlsson, and Olof Johansson-Stenman
In a natural field experiment, the authors quantified the importance of anonymity, reciprocity, and conformity through the provision of social reference levels in order to explain voluntary contributions. In the study setting, the effects of the various treatments were small, suggesting that the self-image as an honorable person, irrespective of other people's opinions, could be an important explanation of contribution behavior. The experiment overall showed no clear evidence that current practice by charitable organizations is inefficient.
Does Context Matter More for Hypothetical Than for Actual Contributions?: Evidence from a Natural Field Experiment
EfD DP 08-02 | March 2008
Francisco Alpizar, Fredrik Carlsson, and Olof Johansson-Stenman
Just how important social context is for voluntary contributions is investigated in a natural field experiment, where subjects made either actual or hypothetical contributions to a national park in Costa Rica. This study found that both anonymity and information about others' donations influenced contributions, implying that validity testing of stated preference methods needs to include comparisons of hypothetical and actual behavior for given social context.
Social Capital and Institutions in Rural Kenya: Is Machakos Unique?
EfD DP 08-01 | March 2008
Wilfred Nyangena and Thomas Sterner
The revitalization of Machakos, Kenya, from overpopulation and resource degradation - seemingly by its population growth - has added another round to the Boserupian vs. Malthusian debate, and may make Machakos unique. This study investigated Machakos' improvement by looking at the role of social capital with principal component analysis and found significant differences between Machakos and two other Kenyan regions, particularly in the formation of associations.