Ma, S., S.M. Swinton, and F. Lupi
Presented at the All Scientist Meeting (2011-04-15 to 2011-04-15 )
Payment-for-Ecosystem-Services (PES) programs are gaining appeal as flexible approaches to inducing the voluntary provision of ecosystem services (ES). Farmers, who manage agricultural ecosystems, provide important nonmarket ecosystem services to the public by their choice of production inputs and management practices. Although there exist various PES programs in the world, we are aware of none that was designed based on a comprehensive understanding of the underlying supply and demand of ecosystem services. Taking advantage of unique, coupled datasets of stated preferences, this study combines a supply-side cost function of farmers’ willingness to adopt practices that provide increased ES with a demand-side social benefit function of residents’ willingness to pay for these ES. The result is an empirically based, welfare-maximizing price and quantity of ES that can inform the design of future PES programs.
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