Identifying the Causes of Low Participation Rates in Conservation Tenders

John Rolfe, Steve Schilizzi, Peter Boxall, Uwe Latacz-Lohmann, Sayed Iftekhar, Megan Star, Patrick O'Connor

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Conservation tenders are being used as a policy mechanism to deliver environmental benefits through changes in land, water and biodiversity management. While these mechanisms can potentially be more efficient than other agri-environmental and payment for ecosystem service schemes, a key limitation in practice is that participation rates from eligible landholders are often low, limiting both efficiency and effectiveness. In this paper we document and review potential causes of low participation in two categories: those that treat participation as an adoption issue focused on searching for the landholder, farm or practice characteristics that limit participation; and those that treat it as an auction design issue, looking for the different auction, contract or transaction cost elements that limit landholder interest in participation. We then model how landholders make choices to engage and bid in a tender, making three important contributions to the literature on this topic. First, we document the low participation rates in conservation tenders, mostly across developed countries, an issue that has received little attention to date. Second, we explain that a decision to participate in a conservation tender involves three simultaneous decisions about whether to change a management practice, whether to be involved in a public or private program with contractual obligations, and how to set a price or bid. Third, we explain that there are a number of factors that affect each stage of the decision process with some, such as landholder attitudes and risk considerations, relevant to all three. Our findings suggest that decisions to participate in a conservation tender are more complex than simple adoption decisions, involving optimisation challenges over a number of potentially offsetting factors.

Original languageEnglish
Pages (from-to)1-45
Number of pages45
JournalInternational Review of Environmental and Resource Economics
Volume12
Issue number1
DOIs
Publication statusPublished - 2018

Cite this

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title = "Identifying the Causes of Low Participation Rates in Conservation Tenders",
abstract = "Conservation tenders are being used as a policy mechanism to deliver environmental benefits through changes in land, water and biodiversity management. While these mechanisms can potentially be more efficient than other agri-environmental and payment for ecosystem service schemes, a key limitation in practice is that participation rates from eligible landholders are often low, limiting both efficiency and effectiveness. In this paper we document and review potential causes of low participation in two categories: those that treat participation as an adoption issue focused on searching for the landholder, farm or practice characteristics that limit participation; and those that treat it as an auction design issue, looking for the different auction, contract or transaction cost elements that limit landholder interest in participation. We then model how landholders make choices to engage and bid in a tender, making three important contributions to the literature on this topic. First, we document the low participation rates in conservation tenders, mostly across developed countries, an issue that has received little attention to date. Second, we explain that a decision to participate in a conservation tender involves three simultaneous decisions about whether to change a management practice, whether to be involved in a public or private program with contractual obligations, and how to set a price or bid. Third, we explain that there are a number of factors that affect each stage of the decision process with some, such as landholder attitudes and risk considerations, relevant to all three. Our findings suggest that decisions to participate in a conservation tender are more complex than simple adoption decisions, involving optimisation challenges over a number of potentially offsetting factors.",
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Identifying the Causes of Low Participation Rates in Conservation Tenders. / Rolfe, John; Schilizzi, Steve; Boxall, Peter; Latacz-Lohmann, Uwe; Iftekhar, Sayed; Star, Megan; O'Connor, Patrick.

In: International Review of Environmental and Resource Economics, Vol. 12, No. 1, 2018, p. 1-45.

Research output: Contribution to journalArticle

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T1 - Identifying the Causes of Low Participation Rates in Conservation Tenders

AU - Rolfe, John

AU - Schilizzi, Steve

AU - Boxall, Peter

AU - Latacz-Lohmann, Uwe

AU - Iftekhar, Sayed

AU - Star, Megan

AU - O'Connor, Patrick

PY - 2018

Y1 - 2018

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AB - Conservation tenders are being used as a policy mechanism to deliver environmental benefits through changes in land, water and biodiversity management. While these mechanisms can potentially be more efficient than other agri-environmental and payment for ecosystem service schemes, a key limitation in practice is that participation rates from eligible landholders are often low, limiting both efficiency and effectiveness. In this paper we document and review potential causes of low participation in two categories: those that treat participation as an adoption issue focused on searching for the landholder, farm or practice characteristics that limit participation; and those that treat it as an auction design issue, looking for the different auction, contract or transaction cost elements that limit landholder interest in participation. We then model how landholders make choices to engage and bid in a tender, making three important contributions to the literature on this topic. First, we document the low participation rates in conservation tenders, mostly across developed countries, an issue that has received little attention to date. Second, we explain that a decision to participate in a conservation tender involves three simultaneous decisions about whether to change a management practice, whether to be involved in a public or private program with contractual obligations, and how to set a price or bid. Third, we explain that there are a number of factors that affect each stage of the decision process with some, such as landholder attitudes and risk considerations, relevant to all three. Our findings suggest that decisions to participate in a conservation tender are more complex than simple adoption decisions, involving optimisation challenges over a number of potentially offsetting factors.

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KW - LANDHOLDER PARTICIPATION

KW - FARMERS PARTICIPATION

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KW - TRANSACTION COSTS

KW - DEVELOPING-COUNTRIES

KW - MANAGEMENT PRACTICE

KW - ADVERSE SELECTION

KW - REVERSE AUCTIONS

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JO - International Review of Environmental and Resource Economics

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SN - 1932-1465

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