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Willingness to Pay for Forest Property Rights and the Value of Increased Property Rights Security

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Abstract

This paper studies the willingness to pay (WTP) for forest property rights in Viet Nam. We do so by asking respondents to estimate the value of two different forest property rights regimes where only the level of property security differs and all other forest plot characteristics are constant. We use this information to identify the value of the property rights security. Our results reveal that a significant number of individuals are willing to pay for an additional area of forestland but that the amount offered appears to be inadequate to compensate sellers, as very few land market transactions actually take place. The results further indicate that income relates positively to WTP, irrespective of forest property regime. Wealth, age, and ethnicity also have an impact on the amount households are willing to pay. As expected, there was a significant mark-up on the more secure right. Econometric estimates of the difference between the WTP for secure and insecure property rights show that a higher level of female education, and household age decrease the difference between the two WTP measures while the difference tends to increase as income improves. This has important policy implications, as it indicates that households tend to evaluate the property rights institutions differently.

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  1. Department of Economics and Statistics, Göteborg University, Gothenburg, 405 30, Sweden

    Martin Linde-Rahr

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  1. Martin Linde-Rahr
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Correspondence to Martin Linde-Rahr.

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Linde-Rahr, M. Willingness to Pay for Forest Property Rights and the Value of Increased Property Rights Security. Environ Resource Econ 41, 465–478 (2008). https://doi.org/10.1007/s10640-008-9202-3

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  • DOI: https://doi.org/10.1007/s10640-008-9202-3

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