If Possible, Incentivize Individuals Not Groups: Evidence from Lab-in-the-Field Experiments on Forest Conservation in Rural Uganda

Payment for ecosystem services has become one of the most important conservation policy options worldwide. In developing countries, however, payments are often targeted toward communities instead of individuals. Nonetheless, there is little evidence for the effectiveness of different payment schemes in promoting proconservation behavior. We compare three payment schemes (community-based payments [CBP], equality-based individual payments [EBIP], and performance-based individual payments [PBIP]) using dynamic behavioral experiments with 450 participants in 34 Ugandan villages. We further assess the interplay of the payment schemes with stylized local organizations including communication, leadership, and external advice. We find that PBIP lead to better conservation outcomes than EBIP and CBP. Furthermore, PBIP outperform CBP under all tested conditions. Thus, our results provide important insights for the design of future incentive-based conservation interventions, and we underscore how our novel and low-cost approach can be used to increase the effectiveness of conservation policies.