Payments for Ecosystem Services Programs: Predicting Landowner Enrollment and Opportunity Cost Using a Beta-Binomial Model |
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Authors: | David F Layton Juha Siikamäki |
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Institution: | (1) Department of Statistics, Seoul National University, Seoul, 151-742, Korea;(2) Department of Mathematics, Imperial College, London, SW7 2AZ, UK;(3) Division of Mathematical Sciences, Pukyong National University, Busan, 608-737, Korea |
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Abstract: | This paper concerns predicting enrollment in payment for ecosystem services (PES) programs to promote habitat preservation
on private lands. We develop a beta-binomial model to address both program participation and the amount of land enrolled by
each potential enrollee. We apply the estimation approach to stated preference data from non-industrial private forest owners
in Finland. As an alternative econometric model, we also develop a multivariate censored regression model of enrollments.
Using cross-validation, we find that the beta-binomial model predicts at least as well as the multivariate censored model
yet has fewer parameters. Using our estimation results, we demonstrate policy predictions regarding program enrollment and
landowner opportunity cost. |
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