SpringerLink
Log in

Paying for Forest Ecosystem Services: Voluntary Versus Mandatory Payments

  • Published:
Environmental Management Aims and scope Submit manuscript

Abstract

The emergence of new markets for forest ecosystem services can be a compelling opportunity for market diversification for private forest landowners, while increasing the provision of public goods from private lands. However, there is limited information available on the willingness-to-pay (WTP) for specific forest ecosystem services, particularly across different ecosystem market mechanisms. We utilize survey data from Oregon and Washington households to compare marginal WTP for forest ecosystem services and the total WTP for cost-effective bundles of forest ecosystem services obtained from a typical Pacific Northwest forest across two value elicitation formats representing two different ecosystem market mechanisms: an incentive-compatible choice experiment involving mandatory tax payments and a hypothetical private provision scenario modeled as eliciting contributions to the preferred forest management alternative via a provision point mechanism with a refund. A representative household’s total WTP for the average forest management program was estimated at $217.59 per household/year under a mandatory tax mechanism and $160.44 per household/per year under a voluntary, crowdfunding-style, contribution mechanism; however, these estimates are not statistically different. Marginal WTP estimates were assessed for particular forest ecosystem service attributes including water quality, carbon storage, mature forest habitat, and public recreational access. This study finds that survey respondents place significant economic value on forest ecosystem services in both elicitation formats and that the distributions of the marginal WTP are not statistically significantly different.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Notes

  1. Not all forest ecosystem services are public goods (e.g., timber, edible plants). For brevity, we will refer to public good forest ecosystem services described in Stenger et al. (2009) as simply forest ecosystem services.

  2. Massolution 2015CF: The Crowdfunding Industry Report found here: http://www.crowdsourcing.org/editorial/global-crowdfunding-market-to-reach-344b-in-2015-predicts-massolutions-2015cf-industry-report/45376.

  3. In a 3-alternative choice experiment, 2 alternative-specific constants can be identified, but given the unlabeled nature of the survey, this is the appropriate specification (Hensher et al. 2005; Berninger et al. 2010).

  4. Sample size calculations were based on recommendations from Hensher et al. (2005) and were aiming to estimate the probability of accepting an ecosystem service scenario with an accuracy of no less than 10 % at the 5 % level of significance.

  5. We further note that our total WTP estimates are plausible, given dollar amounts reported in meta-analyses of Lindhjem (2007) and Barrio and Loureiro (2010), although exact comparisons are not possible given different valuation scenarios.

  6. Using Gallup data, assume 39.4 % of residents of Oregon identifying/leaning toward Republican Party (44.5 % for the Democratic Party), and using US Census’ 2008–2012 American Community Survey’s estimates of 1.5 million households, 49.5 % share of population as male, 29.7 % reporting bachelor’s degree or higher, and 18.7 % of households with annual income over $100,000.

References

  • Adamowicz W, Louviere J, Swait J (1998) Introduction to attribute based stated choice methods. Final Report for NOAA and the US Department of Commerce

  • Aldanondo-Ochoa AM, Almonsa-Saez C (2009) The private provision of the public environment: consumer preferences for organic production systems. Land Use Econ 26:669–682. doi:10.1016/j.landusepol.2008.09.006

    Article  Google Scholar 

  • Alig RJ, Plantinga AJ, Ahn S, Kline J (2003) Land use changes involving forestry in the United States: 1952 to 1997, with projections to 2050. In: USDA forest service general technical report PNW-GTR-587, Portland

  • Barrio M, Loureiro ML (2010) A meta-analysis of contingent valuation forest studies. Ecol Econ 69(5):1023–1030

    Article  Google Scholar 

  • Batker D, Schmidt R, Harrison-Cox J, Lovell B (2010) The whole economy of the snohomish: the essential economics of ecosystem services. A report prepared for Snohomish County, Everett

  • Berninger K, Adamowicz W, Kneeshaw D, Messier C (2010) Sustainable forest management preferences of interest groups in three regions with different levels of industrial forestry: an exploratory attribute-based choice experiment. J Environ Manag 46:117–133. doi:10.1007/s00267-010-9507-1

    Article  Google Scholar 

  • Beuter JH, Alig RJ (2004) Forestland values. J For 102:4–8

    Google Scholar 

  • Boxall P, Adamowicz WL, Moon A (2009) Complexity in choice experiments: choice of the status quo alternative and implications for welfare measurement. Aust J Agric Res Econ 53(4):503–519

    Article  Google Scholar 

  • Boyd J (2010) Ecosystem services and climate adaptation. Resources for the future issue brief 10–16

  • Bulte E, Gerking S, List JA, De Zeeuw A (2005) The effect of varying the causes of environmental problems on stated WTP values: evidence from a field study. J Environ Econ Manag 49(2):330–342

    Article  Google Scholar 

  • Bush G, Hanley N, Moro M, Rondeau D (2013) Measuring the local costs of conservation: a provision point mechanism for eliciting willingness to accept compensation. Land Econ 89(3):490–513

    Article  Google Scholar 

  • Carlssonn F, Martinsson P (2001) Do hypothetical and actual marginal willingness to pay differ in choice experiments?: Application to the valuation of the environment. J Environ Econ Manag 41(2):179–192

    Article  Google Scholar 

  • Carson R, Groves T (2007) Incentive and information properties of preference questions. Environ Res Econ 37:181–210

    Article  Google Scholar 

  • Cashore B, Auld G, Newsom D (2003) Forest certification (eco-labeling) programs and their policy-making authority: explaining divergence among North American and European case studies. For Pol Econ 5:225–247

    Article  Google Scholar 

  • Champ PA, Flores NE, Brown TC, Chivers J (2002) Contingent valuation and incentives. Land Econ 78(4):591–604

    Article  Google Scholar 

  • Chang JB, Lusk JL (2011) Mixed logit models: accuracy and software choice. J App Econ 26(1):167–172

    Article  CAS  Google Scholar 

  • Chee YE (2004) An ecological perspective on the valuation of ecosystem services. Bio Cons 120(4):549–565

    Article  Google Scholar 

  • Cochran B, Logue C (2011) A watershed approach to improve water quality: case study of clean water services’ Tualatin River Program1

  • Collins JP, Vossler CA (2009) Incentive compatibility tests of choice experiment value elicitation questions. J Enviro Econ Manag 58(2):226–235

  • Costanza R, d’Arge R, de Groot R et al (1997) The value of the world’s ecosystem services and natural capital. Nature 387:253–260

    Article  CAS  Google Scholar 

  • Czajkowski M, Bartczak A, Giergiczny M, Navrud S, Żylicz T (2014) Providing preference-based support for forest ecosystem service management. For Pol Econ 39:1–12

    Article  Google Scholar 

  • Daily GC (1997) Nature’s services. Societal dependence on natural ecosystems. Island Press, Washington, D.C, p 392

    Google Scholar 

  • Davis H, Midghall INC (2010) Oregon forests values and beliefs study. A report prepared for OR For Res Inst and OR DOF. http://www.oregon.gov/odf/board/docs/ofri_vb_study_2010/ofri_2010_report_june.pdf Accessed 15 January 2011

  • Deal RL, Cochran B, LaRocco G (2012) Bundling of ecosystem services to increase forestland value and enhance sustainable forest management. For Pol Econ 17:69–76

    Article  Google Scholar 

  • Freeman AM III, Herriges JA, Kling CL (2014) The measurement of environmental and resource values: theory and methods. Routledge, New York

    Google Scholar 

  • Garber-Yonts B, Kerkvliet J, Johnson R (2004) Public values for biodiversity conservation policies in the Oregon Coast range. For Sci 50(5):589–602

    Google Scholar 

  • Greene WH (2003) Econometric analysis. Pearson Education India, Delhi

  • Groothuis PA, Whitehead JC (2009) The provision point mechanism and scenario rejection in contingent valuation. Agric Res Econ Rev 38(2):271

    Google Scholar 

  • Halsey K (2010) Ecosystem services-a framework for thinking about sustainability. Oregon State Bar-Sustainability Section

  • Hamilton SF, Sunding DL, Zilberman D (2003) Public goods and the value of product quality regulations: The case of food safety. J Pub Econ 87(3–4):799–817

    Article  Google Scholar 

  • Hanemann WM (1984) Welfare evaluations in contingent valuation experiments with discrete responses. Am J Ag Econ 66(3):332–341

    Article  Google Scholar 

  • Hanley N, Wright RE, Alvarez-Farizo B (2006) Estimating the economic value of improvements in river ecology using choice experiments: an application to the water framework directive. J Environ Manag 78(2):183–193

    Article  Google Scholar 

  • Hensher DA, Rose JM, Greene GH (2005) Applied choice analysis: a primer. Cambridge University Press, London

    Book  Google Scholar 

  • Herriges J, Kling C, Liu CC, Tobias J (2010) What are the consequences of consequentiality? J Environ Econ Manag 59(1):67–81

    Article  Google Scholar 

  • Hill MRJ, McMaster DG, Harrison T, Hershmiller A, Plews T (2011) A reverse auction for wetland restoration in the Assiniboine River Watershed, Saskatchewan. Can J Agric Econ 59(2):245–258

    Article  Google Scholar 

  • Hörisch J (2015) Crowdfunding for environmental ventures: an empirical analysis of the influence of environmental orientation on the success of crowdfunding initiatives. J Clean Prod (in press)

  • Jakobsson KM, Dragun AK (1996) Contingent valuation and endangered species: methodological issues and applications. Edward Elgar Publishing, Chicago

    Google Scholar 

  • Jorgensen BS, Syme GJ, Bishop BJ, Nancarrow BE (1999) Protest responses in contingent valuation. Environ Res Econ 14:131–150

    Article  Google Scholar 

  • Keohane NO, Revesz RL, Stavins RN (1998) The choice of regulatory instruments in environmental policy. Harv Environ Law Rev 22:313

    Google Scholar 

  • Kollert W, Lagan P (2007) Do certified tropical logs fetch a market premium?: a comparative price analysis from Sabah, Malaysia. For Pol Econ 9(7):862–868

    Article  Google Scholar 

  • Krieger DJ (2001) The economic value of forest ecosystem services: a review. Report prepared for the Wilderness Society, Washington, D.C

  • Lindhjem H (2007) 20 years of stated preference valuation of non-timber benefits from Fennoscandian forests: a meta-analysis. J For Econ 12(4):251–277

    Google Scholar 

  • Loomis J (2005) Economic values without prices: the importance of nonmarket values and valuation for information public policy debates. Choices Mag 20(3):179–182

    Google Scholar 

  • Lorenzo AB, Blanche CA, Qi Y, Guidry MM (2000) Assessing residents willingness to pay to preserve the community urban forest: a small-city case study. J Arboric 26(6):319–325

    Google Scholar 

  • Lusk JL, Schroeder TC (2004) Are choice experiments incentive compatible? a test with quality differentiated beef steaks. Amer J Ag Econ 86(2):467–482

  • Mollick E (2014) The dynamics of crowdfunding: an exploratory study. J Bus Ventur 29(1):1–16

    Article  Google Scholar 

  • Montgomery CA, Helvoigt TL (2006) Changes in attitudes about importance and willingness to pay for salmon recovery in Oregon. J Environ Manag 78:330–340

    Article  Google Scholar 

  • Moon A (2005) Assessing the impacts of complexity in stated preference methods. University of Alberta, Canada

  • Murphy JJ, Stevens T, Weatherhead D (2005) Is cheap talk effective at eliminating hypothetical bias in a provision point mechanism? Environ Res Econ 30(3):327–343

    Article  Google Scholar 

  • Newell LW, Swallow SK (2013) Real-payment choice experiments: valuing forested wetlands and spatial attributes within a landscape context. Ecol Econ 92:37–47

    Article  Google Scholar 

  • Oregon Department of Forestry (2011) Oregon: forest facts and figures. http://library.state.or.us/repository/2013/201305161432344/2011.pdf. Accessed May 2015

  • Pagiola S, von Ritter K, Bishop J (2004) Assessing the economic value of ecosystem conservation. World Bank, Washington, D.C. https://www.openknowledge.worldbank.org/handle/10986/18391. Accessed 8 June 2015

  • Parks PJ, Murray BC (1994) Land attributes and land allocation: nonindustrial forest use in the Pacific Northwest. For Sci 40(3):558–575

    Google Scholar 

  • Quinn M (2013) Forest stewardship council. Encyclopedia of corporate social responsibility. Springer, Berlin, pp 1146–1149

    Chapter  Google Scholar 

  • Rabotyagov SS, Lin S (2013) Small forest landowner preferences for working forest conservation contract attributes: a case of Washington State, USA. J For Econ 19(3):307–330

    Google Scholar 

  • Rabotyagov SS, Tóth SF, Ettl GJ (2013) Testing the design variables of ECOSEL: a market mechanism for forest ecosystem services. For Sci 59(3):303–321

    Google Scholar 

  • Raudsepp-Hearne C, Peterson GD, Bennett EM (2010) Ecosystem service bundles for analyzing tradeoffs in diverse landscapes. PNAS 107(11):5242–5247

    Article  CAS  Google Scholar 

  • Rondeau D, Schulze WD, Poe GL (1999) Voluntary revelation of the demand for public goods using a provision point mechanism. J Pub Econ 72:455–470

    Article  Google Scholar 

  • Rondeau D, Poe GL, Schulze WD (2005) VCM or PPM? A comparison of the performance of two voluntary public goods mechanisms. J Pub Econ 89(8):1581–1592

    Article  Google Scholar 

  • Rose SK, Clark J, Poe GL, Rondeau D, Schulze WD (2002) The private provision of public goods: tests of a provision point mechanism for funding green power programs. Res Energy Econ 24(1–2):131–155

    Article  Google Scholar 

  • Selman SJ, Greenhalgh MS, Taylor M, Guiling J (2008) Paying for environmental performance: potential cost savings using a reverse auction in program sign-up. WRI Pol note environmental markets No 5, vol 3. World Resources Institute, Washington D.C, pp 1–6

    Google Scholar 

  • Shapansky B, Adamowicz W, Boxall P (2003) Measuring forest resource values: an assessment of choice experiments and preference construction methods as public involvement tools. Department of Rural Economy, University of Alberta, Edmonton

    Google Scholar 

  • Stanton T, Echavarria M, Hamilton K, Ott C (2010) State of watershed payments: an emerging marketplace. Forest-trends. http://www.forest-trends.org/documents/files/doc_2438.pdf. Accessed 8 June 2015

  • Stenger A, Harou P, Navrud S (2009) Valuing environmental goods and services derived from the forests. J For Econ 15(1):1–14

    Google Scholar 

  • Stern PC, Dietz T, Abel T, Guagnano GA, Kalof L (1999) A value-belief-norm theory of support for social movements: the case of environmentalism. Hum Ecol Rev 6(2):81–97

    Google Scholar 

  • Swallow SK (2013) Demand-side value for ecosystem services and implications for innovative markets: experimental perspectives on the possibility of private markets for public goods. Ag Res Econ Rev 42(1):33–56

  • Tóth SF, Ettl GJ, Rabotyagov SS (2010) ECOSEL: an auction mechanism for forest ecosystem services. Math Comput For Nat Res Sci 2(2):99–116

    Google Scholar 

  • Tóth SF, Ettl GJ, Könnyű N, Rabotyagov SS, Rogers LW, Comnick JM (2013) ECOSEL: multi-objective optimization to sell forest ecosystem services. For Pol Econ 35:73–82

    Article  Google Scholar 

  • Train K (2009) Qualitative choice methods with simulation, 2nd edn. Cambridge University Press, New York

    Book  Google Scholar 

  • U.S. Census Bureau (2012) State and county quickfacts: Washington State/Oregon State

  • Vossler CA, Evans MF (2009) Bridging the gap between the field and the lab: Environmental goods, policy maker input, and consequentiality. J Environ Econ Manag 58(3):338–345

    Article  Google Scholar 

  • Vossler CA, Doyon M, Rondeau D (2012) Truth in consequentiality: theory and field evidence on discrete choice experiments. Am Econ J 4(4):145–171

    Google Scholar 

  • WA DNR. Forest certification: Washington State Department of Natural Resources. http://www.dnr.wa.gov/BusinessPermits/Topics/TimberSaleAuction/Pages/lm_forest_certification.aspx. Accessed 25 May 2015

  • WA State Congress House. Forest products industry—landowners conservation Proposals, HB 2541. 61st Congress 2010 Regular Session SB 6256

  • Wiser RH (2007) Using contingent valuation to explore willingness to pay for renewable energy: a comparison of collective and voluntary payment vehicles. Ecol Econ 62(3–4):419–432

    Article  Google Scholar 

  • Xu W, Lippke BW, Perez-Garcia J (2003) Valuing biodiversity, aesthetics, and job losses associated with ecosystem management using stated preferences. For Sci 49(2):247–257

    Google Scholar 

  • Zobrist KW, Lippke BR (2007) Economic costs of different riparian management regulations in the Pacific Northwest. West J Appl For 22(1):36–41

    Google Scholar 

Download references

Acknowledgments

We thank the U.S. National Institute of Food and Agriculture for providing the financial support for this research through Grant WNZ-1398. We further thank Prof. Sandor Toth and Prof. Gregory Ettl for their comments on the early versions of this work. All remaining errors, if any, are our own.

Author information

Authors and Affiliations

  1. Sociology and Sustainable Agriculture, Iowa State University, 339 Science II, Ames, IA, 50011-3221, USA

    Gabrielle E. Roesch-McNally

  2. School of Environmental and Forest Sciences, University of Washington, Box 352100, Seattle, WA, 98195-2100, USA

    Sergey S. Rabotyagov

Authors
  1. Gabrielle E. Roesch-McNally
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Sergey S. Rabotyagov
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Gabrielle E. Roesch-McNally.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Roesch-McNally, G.E., Rabotyagov, S.S. Paying for Forest Ecosystem Services: Voluntary Versus Mandatory Payments. Environmental Management 57, 585–600 (2016). https://doi.org/10.1007/s00267-015-0641-7

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s00267-015-0641-7

Keywords

Search

Navigation