Paying for Forest Ecosystem Services: Voluntary Versus Mandatory Payments

Area of Science:

• Environmental Economics
• Forestry
• Conservation Science

Background:

• New markets for forest ecosystem services offer diversification for private landowners and increase public goods.
• Limited data exists on willingness-to-pay (WTP) for specific forest ecosystem services across different market mechanisms.

Purpose of the Study:

• To compare household WTP for forest ecosystem services under two distinct market mechanisms.
• To assess marginal and total WTP for bundles of services from Pacific Northwest forests.

Main Methods:

• Utilized survey data from Oregon and Washington households.
• Employed an incentive-compatible choice experiment (mandatory tax) and a provision point mechanism (voluntary contribution).
• Analyzed WTP for specific attributes: water quality, carbon storage, habitat, and recreation.

Main Results:

• Estimated total WTP: $217.59/household/year (tax) vs. $160.44/household/year (voluntary); not statistically different.
• Marginal WTP estimates for specific forest ecosystem service attributes were assessed.
• Distributions of marginal WTP were not statistically significantly different between the two mechanisms.

Conclusions:

• Survey respondents place significant economic value on forest ecosystem services.
• The market mechanism (mandatory tax vs. voluntary contribution) did not significantly alter WTP estimates.
• Findings support the potential for developing diverse market mechanisms for forest ecosystem services.