Resource information
This paper informs the national and
international policy discussions related to the adoption of
the United Nations Reducing Emissions from Deforestation and
Forest Degradation Programme. Effective program instruments
must carefully consider incentives, opportunity costs, and
community interactions. A choice experiment survey was
applied to rural Ethiopian communities to understand
respondents’ preferences toward the institutional structure
of the program contracts. The results show that respondents
have particular preferences about how Reducing Emissions
from Deforestation and Forest Degradation programs are
structured with regard to the manner in which the payments
are divided between the households and the communities, the
restrictions on using grazing land, and the level of
payments received for the program. Surprisingly,
restrictions on firewood collection do not significantly
impact contract choice. The paper further analyzes the
structure of the preferences by using attribute interaction
terms and socio-demographic interaction terms. The analysis
finds significant regional variation in preferences,
indicating that Reducing Emissions from Deforestation and
Forest Degradation should be tailored to specific regions.
Finally, the marginal willingness to pay for attributes is
calculated using the traditional preference space approach,
as well as the more recent willingness-to-pay approach.
