Limitations and further research

This study contributes to a better understanding of the relationships among PES out-comes, PES policy design and contextual factors. Nevertheless, the results have to be critically assessed with respect to both theoretical assumptions made and methods ap-plied in this study.

We have estimated the environmental additionality conditional on an increase in the number of mixed tree stands using the richness (abundance) of bird species. The results have shown that given a fixed conservation budget, farmers operating highly intensified oil palm plantations have a relatively stronger incentive to expand the number of trees within their oil palm plantations relative to farmers operating extensively managed oil palm plantations. However, the absolute number of bird species (abundance) would still be lower in intensified plantations with increasing number of trees compared to exten-sively cultivated plantations. In our study, the observable measure of bird species rich-ness (abundance) has been used a proxy for a range of ecosystem services provided by birds, such as pest control, seed dispersal and pollination. However, the marginal bene-fits in ecosystem services due to marginal changes in bird species richness (abundance) might be conditional on the initial number of bird species. Further studies are needed to address whether non-linearity of the relationship between bird diversity (abundance) and ecosystem service provision would fundamentally oppose our findings.

Furthermore, our analysis is limited to the analysis of quantitative changes in tree num-bers. Other studies suggest that qualitative factors, such as tree age, tree diversity or the presence of specific functional groups of trees, are crucial to the design of

wildlife-friendly strategies (Clough et al., 2011, Erskesine et al., 2005, Kanowski et al., 2003).

This represents an avenue for further research.

The results, depicted in Chapter II have suggested that farmers’ decisions to re-tain/plant trees on their oil palm plantations is not solely determined by short-term yield maximization considerations. However, in this part of the dissertation we have not incorporated other economic objectives, such as the long-term resilience of the ecosys-tem and further intangible values derived from ecosysecosys-tems, such as cultural services (e.g., spiritual enrichment, recreation and aesthetic experiences). Therefore, the applica-tion of “stated preferences” methods, such as the Contingent Valuaapplica-tion Method (CVM), could be a useful extension to specify the “willingness to accept compensation.”

The analyses of the experimental data have shown that the framing of a monetary in-centive scheme, as PES crowds in conservation behavior. However, the extent to which frame shifting induce changes in environmental behavior in the long run remains un-clear since participants made decisions in only three sequential sessions, each with a different setting. Although we observed crowding-in effects in the first decisions, this effect may disappear or even be reversed in subsequent decisions through durable learning effects (see Cardenas et al. 2000). Further research that investigate the condi-tions under which short term crowding effects due to frame shifting induce changes in the values in the long run is needed.

The consideration of social experimenter demand effects in the analysis of the framing effect, presented in Chapter III, is a first step in identifying the psychological mecha-nisms that underlie framing effects. However, using aggregated survey measures, we have provided suggestive comments rather than figuring out what general principles (theory of framing) can be abstracted from framing effects (see Ellingsen et al., 2012)

Our results have suggested that environmental campaigns prior to the PES implementa-tion might be effective in enhancing conservaimplementa-tion behavior. This issue must be further examined, for example, in framed field experiments in which informational material on the environmental context is explicitly given to the participants prior to the introduc-tion of PES.

The experimental setting is based on a number of assumptions that determine the pre-dicted outcome of the experiment, as shown in the conceptual framework in Chapter IV.

For example, in the experiment low-endowed participants face higher opportunity costs of conservation than high-endowed participants, assuming that poor households face survival constraints when making conservation efforts that endure present sacrifices. In contrast, other scholars suppose that poor households tend to own marginal land (i.e.

lower soil fertility), which results in lower opportunity costs to leave the land in more natural ecosystems. Following the second argumentation, the predicted outcome of the experiment would have changed. Likewise the number of available land units, the dif-ference in the land units between low and high-endowed participants and the group size has implications on the predicted outcomes.

Although we implicitly consider interactions between the fairness criteria of the PES scheme and social preferences, we do not explicitly incorporate this aspect in the con-ceptual framework. Hence the development of an concon-ceptual framework which inte-grates social-welfare preferences with implicit fairness criteria of incentives might be useful in providing progress in conceptualizing observations in experiments (see Char-ness and Rabin, 2002).

In Chapter IV, we have drawn conclusions only with respect to the environmental addi-tionality, neglecting the efficiency of the alternative PES schemes. The discriminatory PES scheme does not come at the costs of environmental additionality as opposed to the equal PES scheme. Considering the implementation costs of the alternative PES scheme may reverse the findings. The implementation costs do not only comprise the direct costs of compensation, but also all types of transaction costs. Since these costs largely depend on the amount of quality of information that need to be gathered, it can be as-sumed that a discriminatory PES would imply higher transaction costs than a flat PES scheme. Further research on the efficiency of different PES scheme designs should therefore put particular emphasis on transaction costs.

When assessing the policy implications it is crucial to consider the external validity of the experiment. Evidence has shown that the necessary abstractions in experimental

settings and even in field experiments increase internal validity at the costs of the ex-ternal validity of experimental results. The applied experimental design does not cover a wide range of institutional factors that are likely to affect the PES adoption of farmers and especially of the poor in reality. In this context further research, that focuses among other factors on transaction costs, insecure land tenure, investment costs, alternative cultivation systems and non-material dimensions of poverty (e.g., status, dignity, and political empowerment) is highly needed to complement the presented experimental findings.