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Xiaodong Chen Kennedy School of Government Harvard University PowerPoint Presentation
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Xiaodong Chen Kennedy School of Government Harvard University

Xiaodong Chen Kennedy School of Government Harvard University

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Xiaodong Chen Kennedy School of Government Harvard University

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  1. Agent-based Modeling of the Effects of Social Norms on Enrollment in Payments for Ecosystem Services Xiaodong Chen Kennedy School of Government Harvard University

  2. Global Conservation Investments • Conservation investments are far below the requirements for conserving ecosystems worldwide • The efficiency of conservation investments may be improved through Payments for Ecosystem Services (PES) • Factors considered for efficient conservation investment • Biological values, demographic conditions, economic conditions, political conditions • Little is known about the effects of social norms

  3. Emergence and Evolution of Social Norms • Social norms are shared understanding of how individual members should behave in a community • Social norms can be represented as actions of members in a community • Social norms may have substantial impacts on human decision-making • Changes in human decision-making due to social norms may in turn change social norms

  4. Agent-based Modeling of the Evolution of Social Norms • Agent-based modeling is a bottom-up approach focusing on individual decision making • Agents are capable of interacting with other agents to obtain ‘knowledge’ about others’ actions and perceive social norms • Perceived social norms of agents may be imperfect and contain random noise • Agents improve their ‘knowledge’ about social norms through ‘learning’ from interactions with others

  5. Payments for Ecosystem Services in China -- Grain-to-Green Program (GTGP) • Main objective: increase forests and grassland to prevent soil erosion • Secondary objective: restore ecosystems and provide wildlife habitat • Payment: 3450 yuan/ha in southwest 2400 yuan/ha in northwest (currently, 1 USD = 6.7 yuan) An example GTGP plot Farmland in cabbage

  6. Wolong Nature Reserve, China Habitat to over 6000 plant and animal species Home to about 4500 people

  7. Objectives • Develop agent-based model to simulate effects of social norms on land enrollment in PES programs • Assess effects of PES program design on patterns of social norms

  8. Methods

  9. Household Interviews Sample: 304 of 1197 households Response rate: 95% Questions: demographic, • socioeconomic, • land reconversion (22.6%) Policy scenario questions for people who plan to reconvert GTGP plots when current payments end

  10. Policy Scenarios • GTGP land that household planned to reconvert after the payment ends • Re-enrollment plans if a new policy was in place • Policy Attributes • Payment: 1500, 3000, 4500 yuan/ha • Neighbors’ behavior: 25%, 50%, 75% would reconvert • Attribute combinations varied across respondents

  11. Opportunity Cost Estimation is the probability the jth GTGP plot is re-enrolled is the probability the jth GTGP plot is reconverted to crop production after the payments end is the probability of re-enrolling the jth GTGP plot under a new payment program, for plots that will be reconverted to crop production after initial payments end

  12. Opportunity Cost Estimation • P(reenroll j) is estimated at different payments • The per hectare opportunity cost of a land plot is the payment level at which the land plot will be re-enrolled

  13. Simulation Rules -- PES Program • PES program contracts last for one unit of time • All households make reenrollment decisions for all of their GTGP plots at each time point

  14. Simulation Rules -- Agents • Each household was modeled as an agent • Agents were simulated for multiple units of time to allow for multiple opportunities for making reenrollment decisions • Agents interact with each other to perceive social norms as measured by reenrollment decisions of their neighboring agents at previous times • Agents would reenroll a GTGP plot if the payment is larger than the opportunity cost of the plot

  15. Simulation Rules – Emergence and Evolution of Social Norms • Social norms in each community were measured as the proportion of households reconverting their GTGP plots • Agents cannot obtain all information on social norms through one round of interaction • Perceived social norms time = 1 = 0.5 • Perceived social norms time = j = • knowledge time = j * neighbors’ action time = j-1 + • (1 – knowledge time = j) * random norm • Knowledge increases through agents’ ‘learning’ from additional interactions with other agents

  16. Simulation Experiments • One-time reenrollment of GTGP land under different payments • Dynamics in land reenrollment due to social norms under different levels of payments, initial_knowledge, and learn

  17. Results

  18. Pooled Logit Estimation of Re-enrollment under A New Payment Program

  19. Amount of GTGP Land Reenrolled at Different Payments current payment

  20. Dynamics in GTGP Land Reenrollment under Different Payments 6.2 ha 7.7 ha 6.4 ha

  21. Dynamics in GTGP Land Reenrollment under Different Levels of Initial_knowledge about Social Norms

  22. Dynamics in GTGP Land Reenrollment under Different Levels of Learn about Social Norms

  23. Conclusions • Over 15% more GTGP land can be reenrolled at the same payment if social norms are leveraged through multiple rounds of interactions. • The effects of social norms were largest at intermediate payments. • Land enrollment may converge to different levels at different times due to different levels of ‘initial_knowledge’ and ‘learn’ about social norms

  24. Acknowledgments • People • F. Lupi, L. An, R. Sheely, A. Vina, J. Liu • Financial Support • National Science Foundation • National Institutes of Health • National Aeronautics and Space Administration • Michigan Agricultural Experimental Station • MSU Environmental Research Initiative

  25. Thank You!