PT  - JOURNAL ARTICLE
AU  - Ferraro, Paul J.
AU  - Simpson, R. David
TI  - The Cost-Effectiveness of Conservation Payments
AID  - 10.2307/3146894
DP  - 2002 Aug 01
TA  - Land Economics
PG  - 339--353
VI  - 78
IP  - 3
4099  - http://le.uwpress.org/content/78/3/339.short
4100  - http://le.uwpress.org/content/78/3/339.full
SO  - Land Econ2002 Aug 01; 78
AB  - International donors invest billions of dollars to conserve ecosystems in low-income nations. The most common investments aim to encourage commercial activities, such as ecotourism, that indirectly generate ecosystem protection as a joint product. We demonstrate that paying for ecosystem protection directly can be far more cost-effective. Although direct-payment initiatives have imposing institutional requirements, we argue that all conservation initiatives face similar challenges. Thus conservation practitioners would be well advised to implement the first-best direct-payment approach, rather than a second-best policy option. An empirical example illustrates the spectacular cost savings that can be realized by direct-payment initiatives. (JEL H21, Q28)