Revealed payments for biodiversity protection in Swedish forests

This paper explores the determinants of payments accepted by private land owners for providing biodiversity in Swedish forests. The explanatory power of variables reflecting economic, attitude, learning, spatial autocorrelation, and biological factors are tested by econometric analyses on a panel data set on actual and accepted payments for two types of conservation programs; mandatory set aside and voluntary agreements. The results show both similarities and differences between the two programs; significant and robust results are that payments are increasing in the size of protected areas, and decreasing in spatial autocorrelations. A main difference is that the environmental preferences and ecological productivity have significant effects on actual payments under the voluntary but not the mandatory program.

► Test of factors affecting biodiversity payment for mandatory and voluntary programs.
► Spatial autocorrelation reduces payments for both programs.
► Environmental preferences decrease payments under voluntary program.
► Opportunity cost of land has no robust significant effect on payments.