Spatially coordinated conservation auctions: a framed field experiment focusing on farmland wildlife conservation in China

Liu, Z., Banerjee, S., Cason, T. N., Hanley, N. , Liu, Q., Xu, J. and Kontoleon, A. (2024) Spatially coordinated conservation auctions: a framed field experiment focusing on farmland wildlife conservation in China. American Journal of Agricultural Economics, (doi: 10.1111/ajae.12447) (Early Online Publication)

Abstract

How best to incentivize land managers to achieve conservation goals in an economically and ecologically effective manner is a key policy question that has gained increased relevance from the setting of ambitious new global targets for biodiversity conservation. Conservation (reverse) auctions are a policy tool for improving the environmental performance of agriculture, which has become well-established in the academic literature and in policy making in the US and Australia. However, little is known about the likely response of farmers to incentives within such an auction to (1) increase spatial connectivity and (2) encourage collective participation. This paper presents the first framed field experiment with farmers as participants that examines the effects of two features of conservation policy design: joint (collective) participation by farmers and the incentivization of spatial connectivity. The experiment employs farmers in China, a country making increasing use of payments for ecosystem services to achieve a range of environmental objectives. We investigate whether auction performance—both economic and ecological—can be improved by the introduction of agglomeration bonus and joint bidding bonus mechanisms. Our empirical results suggest that, compared to a baseline spatially coordinated conservation auction, the performance of an auction with an agglomeration bonus, a joint bidding bonus, or both, is inferior on two key metrics—the environmental benefits generated and cost effectiveness realized.

• Item Type: Articles
• Additional Information: The authors are grateful for the financial support from the British Academy (Reference: SRG19\191543), the Cambridge Humanities Research Grants Scheme, and the Research Development Fund of the Department of Land Economy, University of Cambridge. Prof. N. Hanley thanks the EFFECT project (#817903) funded by the European Union under Horizon 2020 for partially funding his work on this paper.
• Status: Early Online Publication
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Hanley, Professor Nicholas
• Authors: Liu, Z., Banerjee, S., Cason, T. N., Hanley, N., Liu, Q., Xu, J., and Kontoleon, A.
• College/School: College of Medical Veterinary and Life Sciences > School of Biodiversity, One Health & Veterinary Medicine
• Journal Name: American Journal of Agricultural Economics
• Publisher: Wiley
• ISSN: 0002-9092
• ISSN (Online): 1467-8276
• Published Online: 29 January 2024
• Copyright Holders: Copyright © 2024 The Authors
• First Published: First published in American Journal of Agricultural Economics 2024
• Publisher Policy: Reproduced under a Creative Commons license