Social Preferences in Conservation under External Rewards and the Role of Group Heterogeneity and Market Orientation: Experimental Evidence from the Andes

Abstract

"External reward mechanisms may provide resource users with an incentive to cooperate in common resource dilemmas so as to conserve that what benefits wider society, such as public ecosystem services. Yet relatively little is known so far about the extent to which these formal institutions interact with existing social preferences subject to group heterogeneities and different market contexts. This paper seeks to contribute to filling this research gap, by building on an impure public goods game incorporating unequal initial resource endowments, as well as different payment modes, in the context of agrobiodiversity conservation. Field experiments were conducted with farmers in market orientated communities from Bolivia and subsistence based ones from Peru. Findings indicate that farmers from commercial orientated backgrounds tend to free-ride on one another, whereas in subsistence-based communities inequality aversion plays an important role in determining conservation levels. Further, it is found that in the latter context, where pro-social behaviour is strong, rewards from outside the community might do more harm than good by spurring free-riding behaviour. Promisingly though, in communities that have suffered from an erosion of pro-social norms, certain reward systems appear to reverse anti-social dynamics and thus may contribute to solving conservation problems. These results highlight the importance of existing social preferences in determining the effectiveness of external rewards and the social costs involved by such interventions."