customer base analysis partial defection of behaviourally loyal clients in a non contractual fmcg retail setting customer relationship management crm enjoys increasing attention as a countermeasure to switching behaviour of customers because foregone profits of partially defected customers can be significant an increase of the retention rate can be very profitable in this paper we focus on the treatment of a company s most behaviourally loyal customers in a non contractual setting we build a model in order to predict partial defection by behaviourally loyal clients using three classification techniques logistic regression automatic relevance determination ard neural networks and random forests focusing on partial attrition of high frequency shoppers who exhibit a regular visit pattern may overcome the problem of unidentifiability of total defection in non contractual settings classification accuracy pcc and area under the receiver operating characteristic curve auc are used to evaluate classifier performance on a test hold out sample using real life data from an fmcg retailer we show that future partial defection can be successfully predicted i e exceeding the benchmark hurdle of the null model there are no significant differences in terms of performance among alternative classification techniques similar to direct marketing applications we find that past behavioural variables more specifically rfm variables recency frequency and monetary value are the best predictors of partial customer defection this set of variables complements demographic variables confirming findings by other authors about its importance in predicting churn behaviour moreover additional variables listed in decreasing order of importance such as the length of customer relationship mode of payment buying behaviour across categories usage of promotions and brand purchase behaviour are shown to be moderately useful to incorporate in attrition models

spatial targeting of payments for environmental services a tool for boosting conservation benefits abstract payments for environmental services pes have become an increasingly popular market based instrument to translate external non market environmental services into financial incentives for landowners to preserve the ecosystems that provide the services however lack of spatial differentiation in the targeting mechanism may lead to efficiency losses addressing this challenge we construct an applied site selection tool which takes into account three variables that vary in space environmental services provided risks of losing those services and participation costs using data from costa rica s nicoya peninsula we empirically test the tool s potential to increase the financial efficiency of the forest focused pes program in place results show that given a fixed budget efficiency increases radically if per hectare payments are aligned to landowners heterogeneity in participation costs involving opportunity transaction and direct costs of protection respectively selecting sites based on environmental service potential also moderately increases efficiency overall additionality could in the best case be doubled but remains generally limited due to current low deforestation risks prevailing in costa rica to take advantage of the high efficiency potentials of flexible payments we propose inverse auction systems as a cost effective approach for the determination of micro level participation costs

using water allocation in israel as a proxy for imputing the value of agricultural amenities this paper uses the water allocation economy in israel as a proxy for imputing the value of agricultural amenities a general equilibrium model is developed and incorporates agricultural amenities as byproducts of agricultural production water trade channels and multiple water types the premise is that until a decade ago water policy in israel was interlinked with agricultural land use policy integrating a monte carlo analysis the model searches for a baseline minimum value of agricultural amenity that makes household in the counterfactual scenario indifferent between the administrative and market mechanisms the minimum imputed value is around 109 agricultural output the intuition is that the gains in economic welfare from improved water use efficiency are offset by the losses in social welfare due to a reduction in available agricultural amenities

rethinking ecosystem services to better address and navigate cultural values ecosystem service approaches have become a prominent basis for planning and management cultural services and non use values are included in all major typologies and present some of the most compelling reasons for conserving ecosystems though many barriers exist to their explicit characterization the values that conform least well to economic assumptions variously lumped together with as cultural services have proven elusive in part because valuation is complicated by the properties of intangibility and incommensurability which has in turn led to their exclusion from economic valuation we argue that the effectiveness of the ecosystem services framework in decision making is thwarted by i conflation of services values and benefits and ii failure to appropriately treat diverse kinds of values we address this challenge by 1 distinguishing eight dimensions of values which have implications for appropriate valuation and decision making 2 demonstrating the interconnected nature of benefits and services and so the ubiquity of intangible values 3 discussing the implications of these propositions for ecosystem services research and 4 outlining briefly a research agenda to enable decision making that is ecologically appropriate and socially just because many ecosystem services co produce cultural benefits full characterization of services must address non material values through methods from diverse social sciences

protecting forests biodiversity and the climate predicting policy impact to improve policy choice p olicies must balance forest conservation s local costs with its benefits local to global in terms of biodiversity the mitigation of climate change and other eco services such as water quality the trade offs with development vary across forest locations we argue that considering location in three ways helps to predict policy impact and improve policy choice i policy impacts vary by location because baseline deforestation varies with characteristics market distances slopes soils etc of loca tions in a landscape ii different mixes of political economic pressures drive the location of different policies and iii policies can trigger second order or spillover effects likely to differ by location we provide empirical evidence that suggests the importance of all three considerations by reviewing high quality evaluations of the impact of conservation and development on forest impacts of well enforced conservation rise with private clearing pressure supporting i protection types e g federal state dif fer in locations and thus in impacts supporting ii differences in development process explain differ ent signs for spillovers supporting iii

payments for pioneers revisiting the role of external rewards for sustainable innovation under heterogeneous motivations abstract acknowledging the diversity of preferences goals and motivations of individuals is key to promote the effectiveness of incentive based conservation interventions this paper analyses the heterogeneity of motivations to adopt silvopastoral practices a social ecological innovation for soil conservation and carbon emission reduction we use q methodology to identify smallholders views with regard to these practices in a community in the forest frontier in chiapas mexico the analysis uncovers three main perspectives self sufficient pioneers environmentally conscious followers and payment dependent conservatives we discuss these perspectives around three topics smallholders predisposition to adopt silvopastoral practices their views about needing external payments to sustain their livelihood and the diffusion of innovative sustainable practices we relate these perspectives with livelihood characteristics and with observed adoption levels under a pilot programme to promote silvopasture our findings suggest that incentives other than payments may be more appropriate for those more likely to adopt and that payments could encourage rent seeking strategies and not necessarily promote permanent behavioural change we suggest ways for designing more effective and adaptive environmental conservation programmes to foster adoption and continuation of social ecological innovations

to value or not to value that is not the question abstract should we reject money when we value nature like most environmentalists ecological economists are increasingly divided on this question synthesizing political ecology with ecological economics we argue that this way of framing the question is limited we propose a reformulation of the question into when and how to value with money and under what conditions we recommend four criteria for a sound choice environmental improvement distributive justice and equality maintenance of plural value articulating institutions and confronting commodification under neo liberalism we call for due attention to the socio political context within which a valuation is placed and the political goals it serves the relevance of this framework is demonstrated by applying it to three practical cases pollution damages water pricing and payments for ecosystem services

a tale of two communities explaining deforestation in mexico summary deforestation policies in mexico need to recognize heterogeneity in community s management schemes in communities that extract wood from the forest for profit forestry projects generate funds whose investment in public goods increases the value of standing forest to those not receiving direct dividends from the projects increases in such investment help decrease deforestation in communities with other livelihoods deforestation decreases with the community s ability to form a coalition that cooperates in reducing forest clearing this is easier in smaller communities with more experienced leaders analysis using data collected in 2002 combined with satellite imagery verifies the models predictions

designing payments for environmental services in theory and practice an overview of the issues abstract payments for environmental services pes have attracted increasing interest as a mechanism to translate external non market values of the environment into real financial incentives for local actors to provide environmental services es in this introductory paper we set the stage for the rest of this special issue of ecological economics by reviewing the main issues arising in pes design and implementation and discussing these in the light of environmental economics we start with a discussion of pes definition and scope we proceed to review some of the principal dimensions and design characteristics of pes programs and then analyze how pes compares to alternative policy instruments finally we examine in detail two important aspects of pes programs their effectiveness and their distributional implications pes is not a silver bullet that can be used to address any environmental problem but a tool tailored to address a specific set of problems those in which ecosystems are mismanaged because many of their benefits are externalities from the perspective of ecosystem managers pes is based on the beneficiary pays rather than the polluter pays principle and as such is attractive in settings where es providers are poor marginalized landholders or powerful groups of actors an important distinction within pes is between user financed pes in which the buyers are the users of the es and government financed pes in which the buyers are others typically the government acting on behalf of es users in practice pes programs differ in the type and scale of es demand the payment source the type of activity paid for the performance measure used as well as the payment mode and amount the effectiveness and efficiency of pes depends crucially on program design

towards a fair constructive and consistent criticism of all valuation languages comment on kallis et al 2013 we provide critical notes to the paper by kallis et al 2013 on monetary valuation we evaluate the four criteria they propose for assessing valuation studies we argue that no clear distinction is made between monetary valuation and pricing instruments the selected criteria are more relevant to assessing policy than monetary valuation the examples provided are not representative of the diversity of valuation studies encountered in the literature moreover no clear examples are provided of where valuation and associated cost benefit analysis of environmental policy go wrong we plea for a more fair constructive and consistent criticism of all valuation languages and offer relevant issues for consideration

the influential factors of china s regional energy intensity and its spatial linkages 1988 2007 abstract a large amount of literature on china s energy intensity seldom considers the regional differences of energy intensity inside china and the spatial effects based on spatial statistics methods this paper explores the regional imbalance of china s provincial energy intensity and the spatially correlation of energy intensity among provinces using spatial panel data models this paper finds that gdp per capita transportation infrastructure the level of marketization and scientific and technological input significantly reduce the energy intensity the ratio of heavy industries to total industries and the ratio of coal consumption to total energy consumption significantly expand the energy intensity meanwhile the coefficient of the ratio of export to gdp is not significant then the spillover and convergence of china s regional energy intensity have been tested the results indicate that the spillover effect between the eastern and western china is remarkable and there exist absolute convergence of provincial energy intensity moreover gdp per capita transportation infrastructure the level of marketization and scientific technological input are conducive to conditional convergence after the spatial effects are controlled according to the empirical results this paper proposes some policy suggestions on reducing china s energy intensity

environmental and distributional impacts of conservation targeting strategies abstract resource purchasing funds have become a major tool for environmental protection and resource conservation these funds use various strategies to target resources for conservation the choice of which may lead to striking differences in environmental performance this paper develops an analytical framework to analyze the impact of alternative targeting strategies on different interest groups including consumers producers labor and environmentalists we show that ignoring the output price effect of purchasing funds reduces environmental gain and in some cases may make a purchasing fund counterproductive and we argue that the optimal design of targeting criteria must consider the price feedback effect

payments for ecosystem services as commodity fetishism abstract payments for ecosystem services pes economically reward resource managers for the provision of ecosystem services and are thus characterised by i an ecological function subject to trade ii the establishment of a standard unit of exchange iii and supply demand and intermediation flows between those who sell and buy ecosystem services this paper departs from the term commodity fetishism broadly understood as the masking of the social relationships underlying the process of production to illuminate three invisibilities in the commodification of ecosystem services firstly we argue that narrowing down the complexity of ecosystems to a single service has serious technical difficulties and ethical implications on the way we relate to and perceive nature secondly the commodification of ecosystem services denies the multiplicity of values which can be attributed to these services since it requires that a single exchange value is adopted for trading finally we suggest that the process of production exchange and consumption of ecosystem services is characterised by power asymmetries which may contribute to reproducing rather than addressing existing inequalities in the access to natural resources and services

efficiency of payments for environmental services equity and additionality in a case study from a biosphere reserve in chiapas mexico payments for environmental services pes have been claimed as a more efficient way of accomplishing conservation and development goals than other indirect strategies reaching their optimum when the buyer pays the opportunity costs of the foregone benefits different inefficient situations have been described like lack of additionality where payments are given for practices that would have been adopted anyway trade offs between efficiency and equity of pes have usually emerged as well in this paper we assess the equity additionality and stakeholders perceptions of a pes scheme in a mexican community inside a biosphere reserve we applied structured interviews to all adults a total of 66 people from 31 households our results show a dual response in equity and additionality depending on land tenure pes have an egalitarian effect within landowners and landless groups but it broadens the gap between them additionality is low for landowners and high for the landless people in the community even though the former are the ones with full decision over the land although the scheme does not seem efficient under the classical pes paradigm it is perceived as a reward reinforcing conservation attitudes even though most of the interviewees claim it to be insufficient

common pool resource appropriation under costly cooperation abstract in addition to the usual fixed costs we introduce variable costs in a community s effort to cooperate in extracting from a common pool resource using a standard supervision mechanism these variable costs are shown to be an increasing function of individual members incentives to default the model explains why we frequently observe communities that all cooperate and have relatively similar resource endowments and yet achieve very different levels of extraction

conditional cash transfers and payments for environmental services a conceptual framework for explaining and judging differences in outcomes we develop a conceptual framework elucidating the main determinants of the impact of conditional cash transfer cct and payments for environmental services pes programs using a simple multi agent model and evaluations of existing programs we show that 1 the share of the population who would meet the program s conditions in the absence of payments is a powerful predictor of program efficiency and that 2 program efficiency is eroded by selection bias people who already meet conditions self select into the programs at higher rates than others we then discuss possibilities for increasing efficiency and criteria for evaluating and choosing between ccts pes or other policy instruments

paying for the hydrological services of mexico s forests analysis negotiations and results abstract mexico faces both high deforestation and severe water scarcity the payment for hydrological environmental services psah program was designed to complement other policy responses to the crisis at the interface of these problems through the psah the mexican federal government pays participating forest owners for the benefits of watershed protection and aquifer recharge in areas where commercial forestry is not currently competitive funding comes from fees charged to water users from which nearly us 18 million are earmarked for payments of environmental services applicants are selected according to several criteria that include indicators of the value of water scarcity in the region this paper describes the process of policy design of the psah the main actors involved in the program its operating rules and provides a preliminary evaluation one of the main findings is that many of the program s payments have been in areas with low deforestation risk selection criteria need to be modified to better target the areas where benefits to water users are highest and behavior modification has the least cost otherwise the program main gains will be distributive but without bringing a pareto improvement in overall welfare

aggregate private r d investments in agriculture the role of incentives public policies and institutions most observers have come to agree that research and development rd for example are they complements or substitutes if they are substitutes then additional private agricultural r d expenditures may not result in larger total agricultural research expenditures the objective of this article is to present econometric evidence quantifying the effects of economic incentives public policies and institutions on national aggregate private agricultural r d investments or expenditures previous studies have generally emphasized only one or at most two of these issues but the primary hypothesis of this article is that all three are important and that interactions exist among them although the european union eu is undergoing major economic integration member countries continue to exhibit substantial differences in institutions public policies size and relative importance of agriculture hence these countries provide a good set of observations for testing our main hypothesis a model is formulated and fitted

towards a unified scheme for environmental and social protection learning from pes and cct experiences in developing countries environmental protection and poverty alleviation in the developing world are usually heralded as joint objectives however these two goals are often associated with different sectoral policy instruments while so called payments for environmental services pes are increasingly being promoted for environmental protection poverty alleviation is increasingly addressed by conditional cash transfers cct program these instruments although aimed to achieve distinct objectives have a number of similarities and challenges in their design and implementation phases this paper elaborates on these similarities and develops a unifying generic framework that is used to discuss the extent to which both approaches could be unified

a dynamic approach to pes pricing and finance for interlinked ecosystem services watershed conservation and groundwater management a theory of payment for ecosystem services pes pricing consistent with dynamic efficiency and sustainable income requires optimized shadow prices since ecosystem services are generally interdependent this requires joint optimization across multiple resource stocks we develop such a theory in the context of watershed conservation and groundwater extraction the optimal program can be implemented with a decentralized system of ecosystem payments to private watershed landowners financed by efficiency prices of groundwater set by a public utility the theory is extended to cases where land is publicly owned conservation instruments exhibit non convexities on private land or the size of a conservation project is exogenous in these cases conservation investment can be financed from benefit taxation of groundwater consumers while volumetric conservation surcharges induce inefficient water use a dynamic lump sum tax finances investment without distorting incentives since the optimal level of conservation is generated as long as payments are correct at the margin any surplus can be returned to consumers through appropriate block pricing the present value gain in consumer surplus generated by the conservation induced reduction in groundwater scarcity serves as a lower bound to the benefits of conservation without explicit measurement of other benefits such as recreation biodiversity and cultural values

taking stock a comparative analysis of payments for environmental services programs in developed and developing countries abstract payments for environmental services pes are an innovative approach to conservation that has been applied increasingly often in both developed and developing countries to date however few efforts have been made to systematically compare pes experiences drawing on the wealth of case studies in this special issue we synthesize the information presented according to case characteristics with respect to design costs environmental effectiveness and other outcomes pes programs often differ substantially one from the other some of the differences reflect adaptation of the basic concept to very different ecological socioeconomic or institutional conditions others reflect poor design due either to mistakes or to the need to accommodate political pressures we find significant differences between user financed pes programs in which funding comes from the users of the es being provided and government financed programs in which funding comes from a third party the user financed programs in our sample were better targeted more closely tailored to local conditions and needs had better monitoring and a greater willingness to enforce conditionality and had far fewer confounding side objectives than government financed programs we finish by outlining some perspectives on how both user and government financed pes programs could be made more effective and cost efficient

the impact of information provision on agglomeration bonus performance an experimental study on local networks the agglomeration bonus is an incentive mechanism to induce adjacent landowners to spatially coordinate their land use for the delivery of ecosystem services from farmland this paper uses laboratory experiments to explore the performance of the agglomeration bonus in achieving the socially optimal land management configuration in a local network environment where the information available to subjects varies and the strategic setting is unfavorable for efficient coordination the experiments indicate that if subjects are informed about both their direct and indirect neighbors actions they are more likely to produce the socially optimal configuration thus effectiveness of the policy can be improved by implementing information dissemination exercises among landowners however given the adverse strategic setting increased game experience leads to coordination failure and optimal land choices only at the localized level independent of the information available to subjects thus success of the agglomeration bonus scheme on real landscapes will have to take account of the roles of both information and experience on participant behavior

why and how much are firms willing to invest in ecosystem services from tropical forests a comparison of international and costa rican firms abstract in recent years schemes for payment for ecosystem services pes have emerged in tropical countries besides public demand the private demand offers the opportunity to develop pes the goal of this paper is to investigate the potential demand by firms for four ecosystem services from tropical forests biodiversity conservation carbon sequestration scenic beauty and watershed protection those are the four granted in the forest legislation and rewarded for in the pes scheme in costa rica to explain stated willingness to invest wti we assess influential factors expectations with respect to financial and non financial benefits of investing in ecosystem services experience with forest ecosystem services firm attributes like origin sector membership and size and finally perceived behavioral control we sent a questionnaire to over 900 international and costa rican firms from different sectors the low response rate of the survey of overall 6 can be explained by in a business context rather new topic of ecosystem services from tropical forests the analysis showed that a firm s willingness to invest wti depends on the origin of the firm international firms are interested in buying certificates mainly for carbon sequestration costa rican firms for all four ecosystem services in the following order watershed protection biodiversity conservation carbon sequestration and scenic beauty indirect and non financial benefits are surprisingly important and can impede the development of ecosystem service markets at the same time the activities of intrinsically motivated green entrepreneurs in a financially oriented firm setting might be a prerequisite within a firm context for bringing such innovative topics as ecosystem services from tropical forests to the table

reconciling theory and practice an alternative conceptual framework for understanding payments for environmental services article i nfo this article provides an alternative and novel theoretical approach to the conceptualization and analysis of payments for environmental services pes we devote special emphasis to institutional and political economy issues which have been somewhat neglected in the literature on pes we argue that the coasean and pure market approach dominating the conceptualization of pes in the literature cannot be easily generalized and implemented in practice by contrast taking into account complexities related to uncertainty distributional issues social embeddedness and power relations permits acknowledging the variety of contexts and institutional settings in which pes operate the alternative approach presented in this introductory article to the special section may be more appealing to pes practitioners since while avoiding restrictive and prescriptive standpoints it allows some key sources of complexities they usually deal with on the ground to be more easily understood

integrating ecology and economics in understanding responses in securing land use externalities internalization in water catchments securing sustainable upstream land use externalities internalization in developing countries water catchments continues to be a serious challenge uluguru water catchment in tanzania presents a compelling case for analysis the catchment is currently under downstream upstream conservation subsidy arrangement however lack of information on the long term impacts of the approach on the functioning and distribution of benefits threatens its sustainability based on system dynamics framework this study developed an integrated ecological economic model to evaluate the long term impacts of this arrangement on the functioning and distribution of benefits the model was also used to compare the arrangement with other economic instruments in the same respect simulation results indicate that the scheme has a potential of securing conservation goals without compromising upstream well being taxing crop inputs and outputs also has a potential securing conservation goal but at the expense of upstream well being tax cuts on inputs to tree fruit and basic domestic goods also secure conservation goals without compromising upstream well being these results show that a downstream upstream subsidy scheme is better for achieving upstream land use externalities internalization without compromising distribution of benefits among beneficiaries and well being of upstream land holders than taxing crop inputs and outputs

exploring the links between equity and efficiency in payments for environmental services a conceptual approach this paper addresses the relationship between equity and efficiency in pes schemes from a conceptual point of view emphasis is placed on the role of the institutional setting social perceptions about economic fairness or distributive justice of the payments uncertainty and interactions between agents including power relations we introduce the heuristic concept of the efficiency equity interdependency curve to illustrate potential combinations between equity and efficiency that may be theoretically possible the paper argues that different types of institutional factors determine which equity efficiency combinations may be potentially feasible influence the actual combination that will be achieved on the ground and condition possible changes in that combination due to exogenous factors by stressing the role of institutional aspects in shaping the equity efficiency relationship the paper attempts to go beyond the dominant coasean vision of pes