@article{Bakkegaard:199438,
      recid = {199438},
      author = {Bakkegaard, R. and Jacobsen, J. and Thorsen, B.},
      title = {Using a hypothetical auction frame to elicit stated  compensation needs to avoid deforestation among households  in the Brazilian Amazon},
      journal = {Scandinavian Forest Economics: Proceedings of the Biennial  Meeting of the Scandinavian Society of Forest Economics},
      address = {2012-05},
      number = {1333-2016-103838},
      pages = {1},
      year = {2012},
      note = {Subject Title: Abstract},
      abstract = {The implementation of global REDD+ programs could  potentially be in the form of a payment
for environmental  service (PES) scheme of historic dimensions. However,  efficiency is a central
issue, and knowledge of patterns of  opportunity costs among rural populations likely to  be
affected by REDD+ remain scant. We applied an auction  and standard contingent valuation
instrument to assess the  WTA compensation among a split sample of rural households  in the
Brazilian Amazon for stopping deforestation  activities. The results are compelling and showed
that the  auction framing format effectively reduced means and  variances of stated WTA. Mean
WTA is reduced by almost a  factor of two, and the sample variance is reduced almost  fourfold.
The auction framing not only effectively reduces  the proportion of very high stated WTA
observations, but  generally reduces upward biases across the distribution. We  compared the
elicited measures to standard foregone income  measures of opportunity costs. While foregone
agricultural  income did imply a higher WTA, other determinants affected  different groups.
Amongst poorer households, REDD+-based  transfers could be an attractive low-risk income
source,  and due to limited alternatives, stated WTA is relatively  close to foregone income
measures. For higher income  groups, larger gap between WTA and opportunity cost  exists,
likely due to the existence of alternative options  for labour and inputs, which reduces the true
opportunity  costs of stopping deforestation. This study is the first of  its kind to apply such a
framing in a WTA study, and the  robustness of results is remarkable and promising given  the
developing country context in which it was  implemented.},
      url = {http://ageconsearch.umn.edu/record/199438},
      doi = {https://doi.org/10.22004/ag.econ.199438},
}