Contract design from a landowner perspective
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There is a political goal in Denmark to increase the amount of forest
from 12 % to 20-25 % of the land area and approximately 63 % of the land
area is farmland which is mainly privately owned. Therefore, political goals
with regard to afforestation cannot be satisfactorily reached on state owned
areas alone and afforestation has been subsidized in Denmark since 1990.
Due to private property rights and the possible conflict with public interest
in nature, methods are needed to induce incentives for afforestation on
private land. Contracts between the state and landowners are a common way
to do this. Often monetary incentives are used as the primary way to
heighten the acceptance rate of the contracts, however, little is known with
regard to the effect of other attributes. This paper present a proposal of a
planned study where we would like to investigate the effects of: main
purpose of the afforestation, value of the option to denounce contract, size
of afforested area and timing of the compensation.
Data will be gathered through a Choice Experiment investigation
(CE). The CE method is chosen since it allows us to investigate both
quantitative and qualitative attributes at various levels.