Designing a Voluntary Mechanism for Private Forest Conservation: An Empirical
Test of Provision Point, Seed Money, and Social Interactions
Yohei Mitani １ , ○ Hideki Shimada ２ , Gorm Kipperberg ３Motivations
Much biodiversity exists on non-industrial private forest (NIPF) land, which constitutes a
substantial share of forestland in the western world. After unsuccessful consequences of the direct
regulation approach, where serious conflicts erupted between NIPF owners and the government inmany countries, incentive-based conservation schemes have been increasingly and intensively
used in recent years for conservation on NIPF land. Much effort has been made empirically tounderstand NIPF owner’s participation behavior in such programs. However, not much literatureexists on the design of a voluntary mechanism for efficient private forest conservation.
Designing voluntary conservation schemes is of extreme importance to efficiently achieve
the biodiversity conservation on NIPF land. In this paper, we consider two lessons fromexperimental economics for their design. The first one is the provision point mechanism (PPM)
for public goods provision, which is known to mitigate the free-rider problem (Rondeau et al.,2005). The second one is the announcement of seed money. A series of field experiments haveshown that publicly announced seed money increases charitable donations (Landry et al., 2006).
We empirically investigate whether these lessons help to improve the design of voluntary
conservation schemes.
With threshold provision, individual owner’s efforts are only worthwhile if others also
cooperate in voluntary conservation schemes. Hence, group members need to assure each otherthat they will cooperate. Namely, individual’s expectations about others’ participation wouldincrease the likelihood of participation. If this is the case, information about with whom the ownerinteracts may influence the participation behavior. We shed light on the effects of social
interactions at the local community level, with comparison to the municipality level.

Design and Implementation of Survey ExperimentThis paper conducts an empirical test of provision points, the announcement of seed money, andsocial interactions in local communities in order to provide an insight into the design of avoluntary mechanism for efficient private forest conservation. To this end, we designed a survey
experiment to investigate the NIPF owner’s intention to participate in a hypothetical conservation

Division of Natural Resource Economics, Graduate School of Agriculture, Kyoto University
Division of Natural Resource Economics, Graduate School of Agriculture, Kyoto University. Oiwake-cho,Kitashirakawa, Sakyo-ku, Kyoto 606-8502, JAPAN. E-mail: hshimada.hs3@gmail.com
３
UiS Business School, University of Stavanger
１２

program. We employed a between-subjects, random split-sample design with five treatments: (1)No Threshold (Control); (2) 50% Threshold at the Municipality Level (50% of owners’participation required); (3) 50% Threshold at the Local Community Level; (4) 30% Threshold at
the Local Community Level; (5) 50% Threshold with 20% Seed Money (i.e. 30% requirement) at
the Local Community Level. We also observed NIPF owner’s subjective expectations about others’
participation in their municipality or local community. We received 733 responses from the 1430
NIPF owners, to whom we sent the survey in Kuma municipality, Ehime, Japan.

Results
The results of our discrete choice econometric analysis with social interactions are as follows (seethe table below). First, we find no statistical evidence of 50% threshold effects at the municipality
level on the likelihood of participation, which is in contrast to the findings of the PPM literature.
Second, setting community level thresholds of both 30% and 50% increases the likelihood ofparticipation compared with the no threshold, though we find no statistical difference between
different levels of thresholds. Third, the announcement of seed money at the community level hasa strong positive effect on the likelihood of participation in terms of statistical robustness and themagnitude of the effect. Finally, subjective expectations about others’ participation sharply andconsistently influence voluntary participation.

Reference
Landry, C. E., Lange, A., List, J. A., Price, M. K., & Rupp, N. G. (2006). Toward an understandingof the economics of charity: Evidence from a field experiment. QJE, 121(2), 747-782.
Rondeau, D., Poe, G. L., & Schulze, W. D. (2005). VCM or PPM? A comparison of the performanceof two voluntary public goods mechanisms. J Pub Econ, 89(8), 1581-1592.
Table: Estimation Results of Robust Standard Error Logit
Coefficient
Marginal Effects−0.001
0.000
50% Municipality(0.432)(0.042)
50% Local Community

0.897(0.458)0.087(0.042)

30% Local Community

0.740(0.430)0.072(0.04)

50% Local Community + Seed Money

1.151(0.441)

0.111(0.042)

Subjective Expectations

7.674(1.266)0.743(0.076)

Notes: Standard errors are in parentheses. NIPF owner’s characteristics are controlled.