Assessing the Performance of Conservation Auctions: An Experimental Study

Schilizzi, Steven; Latacz‐Lohmann, Uwe

doi:10.3368/le.83.4.497

Cited by 112 publications

(57 citation statements)

References 22 publications

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“…This could be achieved by making crosscompliance stricter. In the second place, a policy based on auctions of payments per hectare would be more effective than awarding fixed amount per hectare, in view of the large differences in the compensation required by farms to join the program (LataczLohmann & Van der Hamsvoort, 1997;Schilizzi & Latacz-Lohmann, 2007). This would maximize the effectiveness of this agri-environmental policy measure, either in terms of a larger number of hectares for a given amount of financial resources or lower financial costs for a given amount of farmland (Windle & Rolfe, 2008).…”

Section: Discussionmentioning

confidence: 99%

Assessing the impact of agri-environmental schemes on the eco-efficiency of rain-fed agriculture

Beltrán-Esteve

Gómez‐Limón

Picazo‐Tadeo

2012

Span. j. agric. res.

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This paper analyses the impact of the Agri-environmental Extensification Scheme for the Protection of Flora and Fauna (F&F Scheme) on the eco-efficiency of a sample of dryland farms in the Spanish region of Castile and Leon. Using Data Envelopment Analysis (DEA) and the so-called program decomposition approach to efficiency measurement, we explore whether or not the production technology of the farms included in the F&F Scheme is more ecoefficient than the technology used by farms that are not included in the Scheme. The results obtained confirm the foregoing hypothesis, providing evidence that environmental pressures could be reduced if all farms adopted the F&F Scheme technology. Furthermore, shadow prices are used to assess the monetary value of the potential reduction in environmental pressures that farms could achieve by adopting the F&F Scheme. The results show that the average opportunity cost of the decrease in environmental pressures (€55.65 ha -1 ) is similar to the compensation received by farms included in the F&F Scheme. Nevertheless, bearing in mind the great diversity of farms, we recommend agricultural policymakers to use an auction system to award such environmental contracts.Additional key words: data envelopment analysis (DEA); economic-ecological efficiency; shadow prices; agrienvironmental policy; Spain. ResumenValoración del impacto de los programas agroambientales sobre la eco-eficiencia de la agricultura de secano Este artículo analiza el impacto del Programa Agroambiental de Extensificación para la Protección de la Flora y Fauna (F&F Scheme) sobre la eco-eficiencia de una muestra de explotaciones agrarias de secano de Castilla León. Utilizando técnicas de Análisis de la Envolvente de Datos (DEA) y la aproximación a la medición de la eficiencia conocida como descomposición por programas, se estudia si la tecnología de producción de las explotaciones que adoptan el programa agroambiental es más eco-eficiente que la tecnología utilizada por aquellas explotaciones que no están acogidas al mismo. Los resultados obtenidos confirman esta hipótesis, evidenciando la posibilidad de reducir las presiones ambientales si todas las explotaciones adoptaran la tecnología del programa agroambiental. Asimismo, se utilizan los precios sombra de las presiones para obtener un valor monetario de la reducción potencial que podría alcanzarse adoptando la tecnología F&F. Los resultados muestran que, en promedio, el coste de oportunidad de reducir las presiones (55,65 € ha -1 ) es similar a la compensación que reciben las explotaciones por participar en el Programa

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Section: Discussionmentioning

confidence: 99%

Assessing the impact of agri-environmental schemes on the eco-efficiency of rain-fed agriculture

Beltrán-Esteve

Gómez‐Limón

Picazo‐Tadeo

2012

Span. j. agric. res.

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“…In this setting, they are often referred to as "conservation auctions". Such auctions offer the potential to deliver a cost-efficient allocation of limited government funds for conservation (Latacz-Lohmann and van der Hamsvoort, 1997;Schilizzi and Latacz-Lohmann, 2007) and to reduce information asymmetries concerning private owners' costs of supplying an ecosystem service or of conserving biodiversity (Ferraro, 2008, Reeson et al, 2011Reeson and Whitten, 2014). They involve multiple potential sellers, each typically endowed with multiple units of a "good" for sale -here, plots of land offered to be managed in a specific way -and a single bidder interested in purchasing multiple units.…”

Section: Introductionmentioning

confidence: 99%

Buying spatially-coordinated ecosystem services: An experiment on the role of auction format and communication

Krawczyk

Bartczak

Hanley

et al. 2016

Ecological Economics

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Procurement auctions are one of several policy tools available to incentivise the provision of ecosystem services and biodiversity conservation. Successful biodiversity conservation often requires a landscape-scale approach and the spatial coordination of participation, for example in the creation of wildlife corridors. In this paper, we use a laboratory experiment to explore two features of procurement auctions in a forest landscape: the pricing mechanism (uniform vs. discriminatory) and availability of communication (chat) between potential sellers. We modify the experimental design developed by Reeson et al. (2011) by introducing uncertainty (and hence heterogeneity) in the production value of forest sites as well as an automated, endogenous stopping rule. We find that discriminatory pricing yields to greater environmental benefits per government dollar spent, chiefly because it is easier to construct long corridors. Chat also facilitates such coordination but also seems to encourage collusion in sustaining high prices for the most environmentally attractive plots. These two effects offset each other, making chat neutral from the viewpoint of maximizing environmental effect per dollar spent.

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“…Each experiment involved three bidding rounds to investigate the performance of the auction with repetition (Schilizzi and Latacz-Lohmann 2007). In the present study, the complete data set of three repetitions is used only for the analysis of bid cap expectations in Figure 1 and Equations (4) and (5) below.…”

Section: Experimental Implementationmentioning

confidence: 99%

“…Assessing the performance of the mechanism itself was investigated in Schilizzi and Latacz-Lohmann (2007) who compared, with repetition, the performance of the BC and TC tenders relative to an equivalent fixed-price scheme. The focus in the present study is to examine whether the BC model is capable of predicting the performance of the tendering mechanism using bids predicted from the model rather than observed bids.…”

Section: Introductionmentioning

confidence: 99%

Conservation tenders: linking theory and experiments for policy assessment*

Schilizzi¹,

Latacz‐Lohmann²

2012

Aus J Agri & Res Econ

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Auction theory has mostly focussed on target-constrained auctions and is less well developed for budget-constrained tenders, which are the norm in environmental policy. This study assesses a theoretical model developed for budget-constrained tenders in its capacity to predict tendering performance under information deficiencies typical of field applications. If complemented by laboratory experiments, the model is able to make the correct policy recommendation when comparing the tender to an equivalent fixed-price scheme, even with poor predictive accuracy. This holds even if the policymaker has only limited information on the model's key input variables.

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Assessing the Performance of Conservation Auctions: An Experimental Study

Cited by 112 publications

References 22 publications

Assessing the impact of agri-environmental schemes on the eco-efficiency of rain-fed agriculture

Assessing the impact of agri-environmental schemes on the eco-efficiency of rain-fed agriculture

Buying spatially-coordinated ecosystem services: An experiment on the role of auction format and communication

Conservation tenders: linking theory and experiments for policy assessment*

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