Date of Award

2014

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

First Advisor

Stephen K Swallow

Abstract

This dissertation presents results from studies that empirically examine incentives, values and provision of ecosystem services and restoration employing both realmoney field experiments and hypothetical stated preference mail surveys. Manuscript I reports on a real-money discrete choice experiment (DCE) to assess values for ecosystem restoration efforts focused on non-native plants management in a nature reserve in southern California, USA. Employing a split sample design, participants’ values and preferences for ecosystem restoration projects are compared under a theoretically incentive compatible provision rule, i.e., a single decision-maker’s choice, against a non-incentive compatible provision rule, i.e., a plurality vote using three-option choices for restoring native habitats and birds. A provision rule is a rule or process by which an environmental good is provided and provides an explicit nexus between participants’ choices and actual policy outcomes. In the field experimental settings, participants contributed actual dollars to deliver actual ecosystem restoration projects on the ground. Results from these field experiments suggest that the two provision rules produce statistically equivalent preference functions irrespective of theoretical prediction of incentive compatibility properties of such provision rules. These results may imply that participants in consequential DCE surveys may respond truthfully to the choices despite the absence of a provision rule that is theoretically incentive compatible. Manuscript II reports on a hypothetical DCE survey, which asks survey participants about their values and preferences for attributes of forested wetland parcels. A split sample approach is employed to examine survey participants’ values and preferences for attributes of protecting wooded wetlands using two survey formats. The first survey format asks a group of survey participants two choice tasks and the second survey format asks a different group of participants a series of twelve choice tasks. This manuscript empirically examines whether the alternative choice formats produce consistent responses and thus similar value estimates using trichotomous choices (or three alternatives in each choice task) of wetland parcels protection. Our results suggest that the alternative choice formats produce statistically different underlying preference functions as well as significantly different estimates of scale parameters related to error terms. Further explorations of the participants’ choices from the repeated survey format (or the responses from twelve choice tasks) suggest evidence of precedent-dependent effects relating to a potential to retain higher net surplus from the most-valued alternative in the current task relative to the mostvalued alternative in the preceding task may induce participants to be less cost sensitive and thus have a higher WTP across the sequence. Manuscript III reports on a real-money field experiment designed to generate revenues through experiment participants’ offers to implement manure management projects that improve water quality in local watershed system. The field experiments employ a voluntary donation elicitation as well as a newly established public good institution called individualized price auction (IPA). Participants offers are empirically compared between the two public good institutions both incorporating the incentive mechanisms from experimental economics literature including provision point (PP) with a money back guarantee (MBG) and proportional rebate (PR) of any excess funds beyond the PP. Using a split sample design in a field experimental setting, we ask participants to contribute real dollars towards ecosystem-service public good projects focused on water quality improvements from implementing best manure management practices in local livestock farms in the local watershed system. Our results suggest that voluntary donation elicitation generated higher offers, on average, than those under an IPA approach for all available range of water quality improvements (or quantities of the ecosystem-service public good). Even though participants under both public good institutions made approximately constant offers across the available range of quantities of the good, they showed a statistically different pattern of contribution across the public good treatments. A two-limit tobit model results suggest a statistically significant heterogeneity in offers generated across the public good treatments based on socio-demographic profiles of participants.

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