Doctoral Dissertation Research in Economics: Econometric Evaluation of Costa Rica's Payments for Environmental Services: Scaling up Sample Size and Study Area

North Carolina State University, Raleigh NC

Investigators

Abstract

After experiencing one of the world's highest rates of deforestation in the latter half of the twentieth century, Costa Rica has gained forest cover in the past decade. At the same time, the Costa Rican government implemented the Program of Payments for Environmental Services, which is designed to encourage conservation by private landholders, who own more than half of Costa Rica's forest. Although this is one of the best known examples of direct payments for environmental services, empirical evidence to determine whether and to what degree the program contributed to the increase in forest cover in Costa Rica is notably lacking. This project will (1) develop a detailed understanding of the temporal and spatial variation in the implementation of the Costa Rican Program of Payments for Environmental Services and of the factors that influence participation at different scales (household and regions) (2) extend an on-going NSFfunded evaluation of this program in a case study region by scaling up the sample size, and (3) provide 'proof of concept' matching at a regional scale. The hypotheses are that (1) conservation payments generate a net increase in forest area; (2) estimates of the causal effects of the Costa Rican program on forest cover using data at the household level are comparable with estimates obtained using secondary data at the regional level. The proposed dissertation will build on existing National Science Foundation funded research (SES, 0519194) entitled Private Provision of Public Goods: Applying Matching Estimators to Evaluate 'Direct Payments' for Tropical Forest Conservation. Cross sectional data on socio-economic and biophysical characteristics at the household and property level have been collected for samples of participants and nonparticipants in the program and combined with classified remote sensing imagery of forest cover change. The proposed fieldwork to be undertaken during the first semester of 2007 will complement existing data through (1) semi-structured interviews with key players in order to understand the spatial and temporal variation in implementation of the program from 1997 to 2005; (2) classifying forest cover using new sources of imagery; (3) compiling GIS layers including biophysical and socio-economic characteristics and boundaries of census segments for all of Costa Rica, and (4) developing geo-referenced information on land opportunity costs. Broader Impacts: The proposed research builds on a pilot study already funded by NSF to apply program evaluation techniques to a widely-promoted conservation policy. Through large-sample and national-scale evaluation of the Costa Rica program, this study informs the debate over policy tools for conservation of tropical rainforest. This study also contributes to the literature on program evaluation by incorporating spatial information, testing different scales of analysis, and estimating causal effects of conservation policy in a developing country. The proposed fieldwork results in a rich dataset for both a case study region and all of Costa Rica. The proposed analyses results in conference presentations, submissions to peer reviewed journals, training for Costa Rica students, and a doctoral dissertation.