Suchergebnisse

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.

Risk aversion has generally been found to decrease in income or wealth. This may lead one to expect that poor countries will be more risk averse than rich countries. Recent comparative findings with students, however, suggest the opposite, giving rise to a riskincome paradox. We test this paradox by measuring the risk preferences of over 500 household heads spread over the highlands of Ethiopia. We do so using certainty equivalents, which have rarely been used in developing countries, but permit us to relate the findings to a host of evidence from the West. We find high degrees of risk tolerance, in agreement with the student comparisons finding higher risk tolerance in poorer countries. We also find risk tolerance to increase in income proxies, thus completing the paradox. We thereby use income proxies that can be considered as exogenous, allowing us to conclude that at least part of the causality must run from income to risk tolerance. We furthermore provide extensive methodological discussions on measuring and estimating risk preferences in development settings. (author's abstract)