EVALUATING EFFECTIVENESS OF PAYMENTS FOR FOREST ECOSYSTEM SERVICES BY PROPENSITY SCORES ANALYSIS

Abstract

The Vietnamese Government have been implementing the Payment for Forest Ecosystem Service (PFES) since 2008 with the aim of both improving natural forest status and enhancing income for mountainous community. Yet, effectiveness of the PFES scheme is now debated because of the shortage of experimental studies. So, the overall purpose of this study is to measure the effectiveness of the PFES program by propensity scores analysis. To do so, the study randomly surveyed 469 households located in four districts across Quang Nam province and then estimated the Average Treatment Effect on Treated (ATET). It is found that: (1) the households within PFES had got a insignificantly higher income than those without PES in the short-run; (2) yet, PFES was effective in long-run due to the improvement on income for participants; (3) PFES had an important role in increasing income inequality. Although this study demonstrated reasonable results, some limitations still exist due to the objective reasons, thus more studies with alternative methods should be conducted to confirm the results of this study for better policies.

Keywords

• Propensity scores
• payments for forest ecosystem services
• Average Treatment Effect on Treated
• Average Treatment Effect
• Difference-to-differences approach