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Land Use Policy 28 (2011) 402–412

Contents lists available at ScienceDirect

Land Use Policy

journa l homepage: www.e lsev ier .com/ locate / landusepol

hen should households be compensated for land-use restrictions?decision-making framework for Chinese forest policy

atrina Mullana,∗, Andreas Kontoleonb, Tim Swansonc, Shiqiu Zhangd

Department of Forestry and Environmental Resources, North Carolina State University, Campus Box 8008, Raleigh, NC 27607, United StatesDepartment of Land Economy, University of Cambridge, United KingdomThe Graduate Institute, Geneva, SwitzerlandDepartment of Environmental Sciences, Beijing University, China

r t i c l e i n f o

rticle history:eceived 27 April 2010eceived in revised form 9 July 2010ccepted 21 August 2010

eywords:ompensationroperty rightsorest lands

a b s t r a c t

Competing uses of land mean that regulations aimed at environmental conservation often conflict withthe land-use rights of rural households. Several reports suggest that this has occurred with the intro-duction of the Natural Forest Protection Programme (NFPP) in China, one of the world’s largest loggingban programmes. This paper investigates whether households should be compensated for infringementson property rights, drawing on institutional economics literature on regulation. We distinguish betweencases where regulation solves local collective action problems and increases the welfare of those affected,and those where regulation involves a redistribution of rights from one group to another. We apply thisto the NFPP by estimating the net welfare impacts, using household level stated preference data witheconometric techniques that explicitly account for zero and negative values of the dependent variable.

atural Forest Protection Programme

hinaivariate Tobit

We find that the ban on logging does not affect the net welfare of the affected forest communities. Thisindicates that the losses resulting from the restrictions on property rights are offset by the benefits fromrestrictions on other local households. We also find evidence that a partial reduction in logging would bewelfare increasing, indicating that the NFPP is to some extent addressing local collective action problemsin forest areas. Broader implications for the question of compensating for infringement of property rights

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as the result of regulatory

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Conservation of forest land resources requires that constraintsre placed on individual activities. These constraints can be man-ated by regulation; or incentivised through the use of economic

nstruments. They generally imply some form of land right restric-ion that could equally concern individual or communal rights asell as formal or informal rights (Ostrom, 1990). Depending on the

hoice and design of the policy mechanism, the resource users mayear the costs of the constraints on their behaviour, or they may beompensated for the restriction on their rights and for acceptingequirements to behave in an environmentally sensitive manner.or example, traditional biodiversity conservation approaches have

ncluded the creation of protected areas, in which compulsory rulespecify which activities are permitted. In these cases, compensa-ion may be paid if communities are displaced altogether from theand, but frequently, those who previously used the resources bear

∗ Corresponding author. Tel.: +1 919 518 3313; fax: +1 919 515 6193.E-mail addresses: klmullan@ncsu.edu, katrina@cantab.net (K. Mullan).

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264-8377/$ – see front matter © 2010 Elsevier Ltd. All rights reserved.oi:10.1016/j.landusepol.2010.08.003

ventions in contexts of institutional imperfections are also drawn.© 2010 Elsevier Ltd. All rights reserved.

he costs of the changes (Geisler, 2003; Cernea and Schmidt-Soltau,006; Brockington and Schmidt-Soltau, 2004). In contrast, there

s now increasing support for the use of Payments for Ecosystemervices (PES) as a conservation mechanism. Under this mecha-ism, beneficiaries compensate resource users for costs incurreds a result of behavioural changes (Engel et al., 2008; Pagiola etl., 2002; Wunder et al., 2008). PES are of particular interest foreveloping countries, as they are viewed as a potential means ofchieving both conservation goals and poverty alleviation (Pagiolat al., 2008; Turpie et al., 2008; Wunder et al., 2008). This articleocuses on the implications of mechanism choice for the allocationf property rights, and considers when resource users should beompensated for constraints on their behaviour.

Our specific analysis is motivated by and focuses on recent largecale land-use policy changes in China. The Natural Forest Pro-ection Programme (NFPP) was introduced in 1998 in response

o severe drought in the Yellow River basin and devastatingoods in the Yangtse River basin. It includes a ban on commercial

ogging in natural forests and some plantation forests in the South-est of China and sharp reductions in logging in the Northeast,ith the intention of reducing soil erosion and improving water

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egulation (Zhang et al., 2000). As a result, households in collec-ive forest regions with private forest use rights, are no longerermitted to cut timber for sale. Under the Sloping Land Conver-ion Programme, which was introduced at the same time, ruralouseholds are compensated for the downstream ecological bene-ts provided by converting agricultural land to forest or grasslandXu et al., 2004). Observers have argued that collective forest house-olds should also be compensated for the NFPP on two grounds:rstly because of the loss of their rights to harvest timber (Miaond West, 2004; Cao et al., 2010; Weyerhaeuser et al., 2005), andecondly because of the ecological services they are providing (Xut al., 2006; Cao et al., 2010).

These arguments rest on two underlying assumptions. The firsts that there has been an implicit reallocation of rights from forest-ased households (who have lost the right to harvest timber)o downstream households (who have gained the right to wateruality and flow). The second assumption is that it is appropri-te to compensate for this reallocation. More generally the shiftn support away from regulatory mechanisms for conservation,nd towards PES, implicitly makes similar assumptions. However,he validity of these assumptions is not self-evident as they mayome into conflict with other commonly accepted regulatory prin-iples. For example, if we view the impacts of deforestation on soilnd water as negative externalities, the second assumption runsirectly counter to the Polluter Pays Principle. We examine thewo assumptions as a starting point for determining whether com-ensation is indeed appropriate in the case of the NFPP. The sameuestions are also applicable to whether compensation should beaid when rights are restricted in other contexts, and more gen-rally to the choice of protected areas or regulation versus PES foronservation.

In order to answer the question of when and whether compen-ation is warranted, we compare two alternative scenarios withespect to how local land rights could have been affected by theFPP and then assess the net welfare impacts on rural householdnder each scenario. In the first scenario, the logging ban altershe distribution of property rights away from forest-based house-olds, who are no longer permitted to harvest timber, in favourf downstream households, who benefit from improved environ-ental services. In the second scenario, the logging ban is welfare

mproving for forest-based households (in that it provides localublic goods and services) and regulation is only required if institu-ional failure at the local level prevents the collective action neededor all households to voluntarily reduce their harvests. Using statedreference data on the amount that forest-based households areilling to pay to avoid the logging ban element of the NFPP, we

stimate whether the net welfare impacts on households are pos-tive or negative. We find that faced with a full ban on logging,uch as in the NFPP, forest-based households do not experienceignificant welfare changes. This would suggest that the local ben-fits of the regulation provide implicit compensation for the loss ofhe rights to harvest timber. We also find that households expecto experience net welfare gains from a partial ban on logging, inhich a limited amount of timber may be cut for household use.

his indicates that to some extent the NFPP is addressing a local col-ective action problem as well as providing benefits to downstreamouseholds.

In the course of the paper we make several key contributions.irst we clarify the conceptual framework for assessing the case forompensation when conservation policy may have multiple (and

ountervailing) impacts on the scope of property rights. Second,e show how this framework is specifically relevant in the devel-

ping world context, where land tenure and ‘takings’ laws mayot be well defined. Third, we undertake a stated preference studyhat allows us to empirically examine the issue of compensation

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icy 28 (2011) 402–412 403

or one of the world’s largest forest conservation policies, the NFPPn China. Our paper departs from previous work on compensation,

hich mostly focuses on the losses experienced by those affectedy land-use restrictions. Instead the contribution of our study ishat we highlight the importance of assessing both costs and ben-fits of such interventions and hence assessing overall net impactsf the households affected by conservation policies. We also con-ribute to the limited empirical literature on the welfare impacts ofhe NFPP, and make use of empirical observations to address one ofhe most contentious and pressing issues in modern China, namelyhat of compensation for property right infringements resultingrom regulatory interventions. We show that in such cases, there iso unambiguous response to the question of compensation, buthat instead it is necessary to examine the drivers behind eacharticular intervention as well as the net impacts on particularommunities.

The following section draws on existing literature on regulation,he role of the state, and the reasons for regulatory intervention.

e attempt to substantiate how the drivers for conservation reg-lation and the distribution of costs and benefits affect the case forompensation. We begin by setting up the framework in generalerms, and then examine its application to the NFPP in particular.he Empirical applicationsection describes the data and modellingpproaches that we use to empirically assess the impacts of theFPP. The Resultssection presents the results of our data analy-

is, including both the overall welfare impacts of the logging bannd how those impacts vary between households. The Conclusionsection discusses the implications of these results in the context ofompensation for the constraints placed by the NFPP, and drawsider conclusions about compensation in cases where regulation

estricts private property rights.

ompensation for regulation

ramework for compensation

The question of whether individuals should be compensatedhen regulation places constraints on their property rights is typ-

cally studied under the heading of ‘regulatory takings’ (a keyxample relates to the US Endangered Species Act, see e.g. Blume etl., 1984; Innes et al., 1998; Meltz, 2005; Smith and Shogren, 2002;olasky and Doremus, 1998). This debate starts from an initial pre-umption that private property is protected, and compensationill be paid if government regulation physically expropriates thatroperty. The question is then whether the rights to compensationhould be extended to the impacts of the new regulation, underhich nominal ownership remains unchanged, but the degree of

ontrol over the property is altered. However, this literature isased on legal institutions in the United States and other devel-ped countries. As such, it can only provide limited guidance ineveloping country contexts, where private property rights mayot be clearly defined or enforced and legal rights to compensationay not exist.There is also a further reason why the concept of ‘regulatory tak-

ngs’ is not necessarily useful in guiding the decision about whetherhose constrained by conservation policy should be compensated.his concept only considers the losses incurred by those whoseehaviour has been curtailed by regulation. It does not account forhe losses that would be experienced by society in the absence of

egulation. From an institutional economics perspective, althoughny collective control that prohibits something will have a negativeffect on the regulated parties, at the same time it will positivelympact on either the same or other members of society (Commons,931). This is because although regulation prevents an individual

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daratenatural forest area in China (Swanson et al., 2006).

The stated objectives of the programme are: (1) to reduce tim-

04 K. Mullan et al. / Land U

arrying out certain actions that may hurt others, it also preventsthers from performing the same actions that may hurt the individ-al (Vatn, 2005). Some individuals will be against such conservation

nterventions if they perceive that they are losing rights or privi-eges. However, in the case of an externality and in the absence ofegulation, the adversely affected individuals have no choice buto accept these impacts unless they can pay the property owner totop the externality causing activity (Vatn, 2005). In other words,he state is involved in either case because it has to sanction androtect the property rights represented by the status quo even

f there is no institutional change (Bromley, 1991). We thereforereat property as a bundle of rights, that specify how that property

ay be used (Alchian and Demsetz, 1973), and explicitly considerhanges in both the rights of the owner of the resource and theights of those affected by the use of the resource.

Given the limitations of the literature on regulatory takingshen it comes to determining whether compensation is appro-riate for restrictions on property rights, we consider alternativeecision-making criteria. One option would be to compensateesource users for changing their behaviour when they go beyondhe requirements of the existing regulatory framework but nothen they are merely complying with it. It is straightforward to

rgue that individuals should not be compensated for refrainingrom actions that are prohibited under existing legislation. Forxample, PES schemes may be designed to compensate those whoo beyond the requirements of existing legislation.1 In this case,he compensation decisions would be based on the status quo dis-ribution of rights, so that one would receive compensation if rightshange.

There are, however, two main problems with this approach forealing with the issue of compensation. First, it presumes that thetatus quo allocation of rights is ‘correct’ and/or ‘fair’. Secondly andore importantly perhaps it does not allow for the evolution of

nstitutions and regulations over time. To compensate in all cases ofnstitutional change presumes that because a particular allocationf rights has existed in the past, such an allocation should con-inue. This is not necessarily the case, given that institutions areontinuously evolving (Menard and Shirley, 2005; North, 2006).

There two main reasons why regulations may change over timehich have implications for the issue of compensation. The first is a

hange in the aggregate preferences of members of society, whichenerates demand for a new distribution of property rights. Thesehanges in preferences could be the result of income changes. Forxample, the Environmental Kuznets Curve literature (Dasgupta etl., 2002) suggests that demand for environmental quality increasesith income. This would lead to a shift in perceptions about what

s an acceptable level of forest land conversion, and demand forore stringent environmental regulation. An alternative would

e for those who desired higher environmental quality to reachgreement directly with landowners. This has occurred in somenstances (e.g. the agreement between New York City and landown-rs in the Catskills watershed described by Daily (1997)), however,here there are many individuals affected, the transactions costs

f directly negotiating the environmental change are likely to be

igher than those of lobbying for a change in regulation.

If the new regulation is based on society’s beliefs about whatonstitutes a negative externality and what constitutes a publicood, the previous allocation of rights is no more valid than the

1 For example, the Environmental Stewardship programme in England makesayments to rural landowners for activities that protect the environment and land-cape. However, it not only excludes activities that are already required of farmersnder existing regulations but also explicitly states that the existing requirementsust be met before any payments are made (Natural England, 2008).

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ew allocation. This suggests no automatic justification for com-ensating those who prefer the past situation. However, it is widelycknowledged that institutional change may be difficult to achievef it involves redistribution from one group to another (Libecap,005; Ostrom, 1990; Hersoug and Holm, 2000). As a result, side-ayments may be a practical way to lower the transactions costs of

mplementing a change, by overcoming resistance from those whotand to lose (Alston and Mueller, 2004). Alternatively, if complyingith new regulation involves temporary adjustment costs, equity

onsiderations may give rise to support for assistance with thoseosts for disadvantaged groups.

The second possible reason for regulatory change is that therere external factors that create demand for new forms of inter-ention. Demsetz (1967) and Alston et al. (1996) describe howncreases in the scarcity of land can lead to demand for clearerefinitions of property rights. Alternatively, changes in technologyay generate a need for new institutions to manage how that tech-

ology is used. For example, Ruttan and Hayami (1984) examinehe impacts of the introduction of irrigation and high yielding ricearieties in the Philippines in the 1950s and 1960s. They find thathese technological developments led to transformations of bothand tenure arrangements and employer–laborer relationships.

These cases do not necessarily involve a redistribution of rights.nstead, there is the potential for those involved to gain overall.or example, Mueller (2003) shows how individuals may chooseo constrain their own behaviour through a ‘constitutional con-ract’ in order to address the incentives to steal from one anothern the absence of protection for property rights. In this instance, allre better off if property rights are enforced and those who stealre punished. Similarly, Buchanan (1968) uses the concept of therisoners’ Dilemma to describe how centralisation and coercionay be required to solve the problem of public goods provision.

n these cases, regulation solves a collective action problem thatesults from either free-riding or difficulties in coordination. Thebsence of regulation leads to losses for all concerned.2

In this second scenario, then compensation for the regulatoryhange is not justified because there is already an implicit transfern the form of mutual welfare gains. While the property rights ofach individual may have been restricted by the regulation, theylso benefit from the limitations placed on the property rights ofheir neighbours. Even in the absence of compensation, we wouldxpect support for such a regulation.3

ompensation for the Natural Forest Protection Programme

The Natural Forest Protection Programme (NFPP) was intro-uced by the Chinese government in 2000 as it became increasinglypparent that overharvesting of timber was creating both local andegional environmental problems. The NFPP applies to 17 provincesnd autonomous regions in the upper reaches of the Yangtze River;he upper and middle reaches of the Yellow River; and the North-ast region of China. These provinces contain 69% of the total

er harvests from natural forests from 32 million m3 in 1997 to 12illion m3 by 2003; (2) to conserve nearly 90 million ha of natural

2 Difficulties in solving global environmental problems, such as climate change,llustrate the losses that can occur in the absence of any higher level authority withhe ability to enforce regulations.

3 The two potential drivers for institutional change described in the precedingaragraphs assume that regulatory change is welfare improving on average. Anlternative is that changes in the relative political strength of different groups leadso a redistribution of rights in favour of the stronger group. However, we will notonsider changes that do not increase overall social welfare here.

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orests; and (3) to afforest and re-vegetate an additional 8.7 mil-ion ha by 2010 by means of mountain closure, aerial seedling andrtificial planting (Yin and Yin, 2010). These activities have beenupported with funds from the Chinese government, directed atfforestation and forest protection, and compensation or pensionsor unemployed state forest workers (Xu et al., 2002).

This programme is the largest of its kind in the world, andherefore there has been considerable interest in its impacts. Earlyational-level studies, such as Xu et al. (2002) found that whilehere had been positive impacts on forest cover, there were cer-ain negative effects such as losses in employment in the stateorest sector; reductions in local government finances; and lossesf employment and income for households dependent on the statend collective forest sectors. More recent studies have found smallositive impacts on household incomes, which have been primar-

ly attributed to the reallocation of labor to alternative activitiesuch as agriculture and off-farm work (Shen et al., 2006; Liu et al.,010; Mullan et al., 2010). However, there remain concerns abouthe losses of property rights to use forest land in collective forestreas (Shen, 2001; Katsigris, 2002; Miao and West, 2004; Cao etl., 2010). The income and welfare impacts of the programme areelevant because improving living standards in rural areas is onef the objectives of current forest policy. As the areas where theFPP has been applied include the poorest provinces of China, if

he programme reduces incomes in these areas it will exacerbateural poverty. In addition, if households have no alternative incomeenerating opportunities then enforcement and monitoring costsf the ban may be high.

A point that has been widely argued and which is of particu-ar relevance for the issues raised in the previous section is thatecause the NFPP has led to losses in forest incomes, and hasffectively ‘taken’ household rights to use forest land, compensa-ion should be paid (Cao et al., 2010; Xu et al., 2006; Miao and

est, 2004). Yet, as suggested by the literature reviewed in therevious section, such calls for compensation need not necessar-

ly be accepted prima facie. This article looks in more detail at thease for compensation, on the basis of whether the introductionf the regulation transfers rights from forest-based to downstreamouseholds, or whether it addresses a collective action problem athe local level.

Using the framework described in the previous section, the NFPPas largely been viewed as a redistribution of rights: forest-basedouseholds have lost the right to harvest timber, and downstreamouseholds have gained the right to better water regulation andoil conservation. A plausible driver for this redistribution is a shiftn social preferences following the natural disasters that occurredn the late-1990s. Under this scenario, the case for compensations ambiguous. On the one hand, to compensate gives preference tohe status quo rights allocation, which may not be justified in prin-iple. However, there are a number of reasons why compensationay be appropriate in practice. First, forest-based households are

oorer on average than downstream households and tend to liven remote regions with fewer economic alternatives (Pérez et al.,004). Compensation may therefore be desirable from an equityerspective. Alternatively, efficiency considerations may be rele-ant. For example, Xu et al. (2006) suggest that introducing the bann logging without compensation is likely to reduce incentives tonvest in forest management in future. This could have long termegative consequences for downstream environmental protection.

The alternative scenario we consider is that the NFPP is not

olely a redistribution of rights from one group to another, butnstead solves a collective action problem at the local level. Ifndividual households within forest areas experience negativexternalities from the harvesting activities of their neighbours,here may be reciprocal benefits as a result of restrictions on land-

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se. In this case, the regulatory intervention is not compellingouseholds to provide a wider public good, but provides benefits

or forest-based households themselves. Under this scenario, com-ensation is not justified for communities affected by the ban on

ogging. First, because the same groups experience both the costsnd benefits, so there is no equity justification. Second, because weould expect less resistance to regulations that provide both costs

nd benefits than for those that involve redistribution (Libecap,005; Hersoug and Holm, 2000), this means that compensation isot required for reducing the transactions costs of implementations it might be in the case of redistribution (Alston and Mueller,004).

One question relating to the second scenario is why prob-ems resulting from local externalities would not have alreadyeen solved, either through existing regulation or through collec-ive action at the local level. Where cooperation is prevented byree-riding we would expect that over time, in the small stableommunities that we are focussing on, there would ultimately beome form of collective agreement. This might occur as a resultf repeated interactions (Axelrod, 1984), or the development ofocal institutions to enforce cooperation (Runge, 1986; Ostrom,990; Agrawal, 2001). We would expect that local collective actionroblems might be solved by groups of households or local levelsf government, while redistribution between groups would moreften require central government intervention. We suggest that inhe case of forest management in China’s collective forest regions,he local institutions have not had sufficient time to develop dueo recent policy shocks.

So far we have considered the possibility that a shift in socialreferences for environmental quality was the driver for regulatoryhange. A potential alternative is that the introduction of privateand-use rights in the 1980s created new collective action prob-ems at the local level. Prior to the introduction of the Householdesponsibility System, land was managed at the village level, withhe result that all village level impacts could be internalised. How-ver, with the land tenure reforms of the 1980s (Liu, 2001), somempacts became external to those making decisions about land-use.his would in turn create a need for either local collective action oregulatory intervention.

It would seem surprising that in rural China, where untilecently all activity was carried out collectively, village level col-ective action should prove to be difficult. However, in interviews

ith village leaders, Nee and Sijin (1990) found that, in over half ofillages they visited, collective institutions collapsed entirely afterecollectivisation. Village leaders were left uncertain about theirole with relation to individual household property rights, lead-ng to a decline in public works and collective activity. Since then,ome have begun to develop new ways of promoting the inter-st of the village as a whole, while others have been slower to doo. Other studies of village governance have found that, althoughhere is variation by individual, the majority of village leaders haveocused on the implementation of policies on behalf of higher lev-ls of government rather than taking action on their own initiativeo improve the overall welfare of the village (Rozelle and Li, 1998).owever, there is some indication that this is changing with thelection of leaders and village committee members by the villagershemselves (Zhang et al., 2004).

mpirical application

elfare impacts of the NFPP

In the rest of the paper, we attempt to empirically examinehether the NFPP involves a redistribution of rights or solves a

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Nw2d((of 8.3%, but comparable with the average for other designated ‘poorcounties’ of 10.4% (Guizhou Statistical Bureau, 2005). Qiandongnan

06 K. Mullan et al. / Land U

ocal collective action problem, and consider the implications forompensation. This is done ex post, using stated preference datan how forest-based households have been, or believe they wouldave been, affected by the programme. We use this informationo assess the determinants of household preferences for the log-ing ban. If the NFPP is addressing local environmental problemsuch as soil erosion due to overharvesting, we would expect thathose households at greatest risk of damage would view the loggingan most favourably. Similarly, those households with low risks ofamage or with alternative ways of coping with that risk woulde expected to prefer to continue harvesting timber. We modelouseholds’ preferences regarding the NFPP as:

TP = f (x, d, r, a) (1)

here WTP is the willingness to pay to avoid the logging ban (i.e.t reflects a measure of the negative impacts of the NFPP), x are theocio-economic characteristics of the household, d is the value ofssets at risk of damage, r is the perceived likelihood of damage, andis the extent to which the household has alternative risk copingechanisms.We also elicit values for the total welfare impacts of the NFPP

n households in order to estimate average net welfare impactsf the programme across the forest communities. If net impactsre positive, it suggests that the benefits to households of restric-ions placed on their neighbours outweigh the negative impacts ofhe restrictions that they face themselves. We can therefore inferhat in the absence of the programme there are likely to exist localnsolved collective action problems, otherwise the communityould voluntarily have moved to this position of higher welfare.

n this situation, payment of compensation for the introduction ofhe NFPP is not justified because though the community loses theight to harvest timber it experiences other (overcompensating)ains from the impacts of restricted harvesting by others. If theet impacts are negative, the forest-based communities would notave voluntarily introduced the ban on logging. In this case, basedn the discussion in the preceding sections we infer that the NFPPnvolves a redistribution of rights from forest-based households toownstream households. In the latter scenario, compensation mayr may not be appropriate, depending on the transactions costs ofmplementing the regulation, and the equity implications of theedistribution.

Alternative approaches to considering the impact on averageet welfare would be to look at income impacts or changes in landalues. These would have the advantage over stated preferenceshat they are not hypothetical values, but instead provide directstimates of actual impacts. However, we have not used incomen this case, on the grounds that this would only pick up part ofhe total impacts of the logging ban on forest-based households. Itould not identify non-monetary effects, which may be positive

such as reduced soil erosion, more attractive local surroundingstc.) or negative (e.g. that off-farm employment may involve leav-ng the village).4 In addition to this, much of the agricultural andorest production by households is for consumption within thatousehold, and hence it is not marketed.

Further, though the use of changes in land values is commonhen assessing the impacts of a regulation in the context of com-ensation demands (e.g. Miceli and Segerson, 2000), this does not

eadily apply to the case of China, where households do not holdull ownership rights to forest land, and are limited in the extent tohich they can sell or lease the rights they do hold. This implies thatfunctioning land market (that reflects real asset value) does not

4 See Liu et al. (2010) and Mullan et al. (2010) for estimates of the monetarympacts of the NFPP.

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xist (Brandt et al., 2002). Additionally, even in other developingountries where land markets do exist, if those markets functionmperfectly, land prices may not capture all the non-monetary costsnd benefits that we are focusing on.

Another reason for the use of stated preference techniques ishat they uniquely allow us to assess net welfare values underlternative NFPP scenarios. In particular, apart from assessing theelfare impacts of the full ban on logging, we also ask households

bout the potential welfare impacts of a partial ban on logging,n which limited harvesting is permitted for non-commercial use.

e are interested in this because although the NFPP was initiallymplemented as a complete ban on logging, over time it has beenelaxed in some places (Xu et al., 2002). In addition, the originalrogramme was intended to last for 10 years, so it is due to endhortly. Hence, estimation of the likely welfare effects of a partialan allows us to consider potential policy options for the future asell as look at the impacts of the current programme.

ata collection

The data for this study come from a face-to-face survey of 285ouseholds and 33 village leaders in Guizhou Province in south-rn China, as part of a larger international collaborative researchroject that was completed in May 2006. The households wereelected from 40 villages in three counties in Qiandongnan Dis-rict. The selection was carried out using a stratified random sampleithin each village. The interviews were conducted directly by the

urvey team, without interference from local officials, and the usef face-to-face methods ensured a high level of completeness andccuracy of the data.5 In two of the counties, Liping and Jinping,he NFPP was introduced in 2000. The third county, Congjiang, washe only county in Qiandongnan District where the NFPP was notmplemented.

All three counties are important forest areas, where the mainource of local government income has been from forest activ-ties. However, although the climate and soils are conducive toorest growth, there have been problems of resource depletionith the results that the size of logged timber has decreased over

ime and available forest areas for logging have become moreemote. Interviews with local forest officials indicate that the NFPPn Qiandongnan started in 1998 in four pilot counties, and was thenfficially implemented in the majority of the district in 2000. In theeriod since the implementation of the programme, forest coveras increased from 40.7% in 1995 to 49.37% in 2000; and accord-

ng to estimates of forest officials, it has now reached over 55%.mprovements to forest ecology from this increase are not fullynown as yet.

Our survey region was selected to illustrate the impacts of theFPP on those who are most vulnerable, as these are the groups forhom the absence of compensation is of most concern (Cao et al.,

010). The three survey counties are among the 592 ‘poor counties’esignated by the national government for anti-poverty targetingsee e.g. Park et al., 2002). Poverty rates6 of 10.2% (Jinping), 8.7%Liping) and 11.7% (Congjiang) are higher than the national average

egion also has a relatively large ethnic minority population, with9% coming from minority groups, primarily Miao and Dong.

5 Survey enumerators were hired graduate students from Peking University, whoere trained by the authors of the study.6 Poverty rates are based on the National Statistic Bureau official poverty line of944 per year in 2005.

K. Mullan et al. / Land Use Policy 28 (2011) 402–412 407

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banything to avoid a full ban, and over half were unwilling to payanything to avoid a partial ban.

When we look at the amounts that households were willing topay to avoid the ban (see Table 2), the results show that the mean

7

Fig. 1. Problems with the logging ban.

As well as containing relatively vulnerable communities, theurvey region is one of China’s forest-dependent areas. In the 14ey Chinese forest provinces (Rozelle et al., 2000), forest coveranges between 18% and 63% (China Statistical Bureau, 2005). Atround 50%, forest cover in Qiandongnan falls towards the highnd of this range. Forest output is relatively high, making up 31%f GDP in Qiandongnan, compared with 15% of GDP on averagecross the forested provinces in 2004. Almost all of the forest landn Guizhou Province is under collective ownership. This is similar tother parts of the southern collective forest region such as Fujian,iangxi, Hunan, and Guangdong (Rozelle et al., 2000). The forest

anagement system is also similar to parts of Sichuan and Yunnanrovinces. This article is focused specifically on the impacts of theFPP on collective forest land. We do not attempt to draw conclu-

ions from our results for the northeastern provinces where statewnership predominates.

escriptive statistics

Figs. 1 and 2 display the responses of forest-based householdso qualitative survey questions about their opinions on the loggingan. What we observe is that a substantial proportion of the respon-ents stated that they were not aware of any problems resultingrom the logging ban. Among those who did experience problems,he most common were losses of timber harvests and losses ofncome. Around a fifth of respondents stated that they did not knowf any benefits from the ban on logging. However, almost half saidhat there were soil and water conservation benefits, and 18% saidhat they expect it to lead to sustainable forest use.

Given these qualitative responses, our aim is to determinehether the NFPP provides a local solution to a Prisoners’ Dilemma-

ype problem brought about by the introduction of private propertyights, or whether it has been imposed on forest-based communi-ies for the benefit of other (downstream) communities. In ordero address this central question of the paper we developed a statedreference experiment that allowed us to estimate the net impact

n average welfare of alternative variants of the NFPP programme.ore specifically as part of the household survey described in theata collection section, households were asked to reveal their max-

mum willingness to pay to avoid a renewal of the logging ban oncehe current programme expires. Many households stated that they

ss

tp

Fig. 2. Benefits of the logging ban.

ere not willing to pay anything. When questioned further, theast majority of these respondents stated that it was because thean either left them indifferent or even actually increased theirelfare. Within the following analysis, we assume that those withositive WTP to avoid the renewed ban would experience nega-ive welfare impacts as a result of the ban. Those with zero WTP

ay either experience positive welfare impacts (and hence wouldave provided a negative WTP if they were allowed to do so) or be

ndifferent to the ban (and provided a ‘true’ zero WTP response).Each of the respondents was initially offered a choice of a

enewed full ban on logging lasting 10 years; or no ban on logging,ut an increase in local taxes to pay for downstream environ-ental projects instead. Those who chose to pay to avoid the banere then asked the maximum amount they would be willing toay in Chinese RMB per year. A payment ladder elicitation formatas designed and used in accordance with the recommendations

n Bateman et al. (2002), on the basis that it provides a balanceetween the minimisation of potential biases and other cognitiveifficulties, and maximisation of the information obtained fromach respondent. Respondents were asked to choose their maxi-um WTP for the scenario presented to them chosen from a series

f values starting at zero and increasing by discrete amounts tomaximum of ¥3000. The amounts on the payment ladder wereresented to respondents on a card while they were also read outy the moderators.7 Respondents were then asked the same WTPuestions with regard to a partial ban on logging, in which limitedarvesting would be permitted for household use.8

The results of these questions are shown in Tables 1 and 2.When asked whether they would be willing to pay to avoid a

an on logging (see Table 1), more than 40% were unwilling to pay

All aspects of the survey were tested and piloted on site over two consecutiveummer periods between 2004 and 2005. For full details of the survey design processee Mullan (2008).

8 In the manner suggested by Bateman et al. (2004) respondents were informed athe start that they would be asked about these two separate and mutually exclusiverogrammers in order to avoid biases resulting from the ordering of the questions.

408 K. Mullan et al. / Land Use Policy 28 (2011) 402–412

Table 1Household willingness to avoid logging ban.

Full ban Partial ban

Number % Number %

WTP some amount to avoidban

53 58.2 35 48

vamp

tretdt

E

d(stnmiemr(hmtatoo

sd

wtte

Table 3Reasons for zero WTP (% of total number of zeros).

Full ban (%) Partial ban (%)

I do not want to pay any tax 8.33 13.33

upaTs

w

lpe

R

D

ad

ebnwabattahd

TA

N

Not willing to pay any amountto avoid ban

38 41.8 38 52

Total 91 100 73 100

alues for WTP are all significantly greater than zero. Median valuesre lower than mean values, and the in case of the partial ban, theedian WTP across the whole sample is zero. WTP to avoid the

artial ban is generally lower than to avoid the full ban.In addition to asking maximum WTP for those who indicated

hat they were willing to pay some amount, we also asked theespondents who said they were not willing to pay anything toxplain why. The answers are presented in Table 3, which showshat most of the respondents who chose not to state their WTP valueid so because of their views on the NFPP rather than because ofheir views about the payment mechanism.

conometric modelling

Due to the large number of zero WTP responses as well as theifferent (albeit not easily observable) nature of these responsesi.e. either corner solutions or expressions of negative latent values)imple mean/median estimates of WTP would mask our sample’srue net welfare impacts from the logging ban. Hence, it wasecessary to model the entire WTP distribution and then esti-ate expected conditional WTP. A similar approach can be found

n Kristrom (1997), Clinch and Murphy (2001), and Macmillant al. (2001), who account for the possibility that respondentsay experience positive, negative or neutral welfare effects as a

esult of some policy intervention. Further, the studies by Kristrom1997), Bohara et al. (2001), and Nahuelhual-Munoz et al. (2004)ave shown that there can be significant differences between esti-ates of WTP using strictly non-negative values and estimates

hat use distributional assumptions which allow for censored neg-tive values. Beyond providing more accurate estimates of WTP,he econometric analysis will also shed light on the determinantsf these responses, thus providing further insights into the impactsf the NFPP on different groups.

The starting point for modelling censored data is to use thetandard Tobit model in which the data generating process can beescribed by the following observability rule:

WTPn = WTP∗n if WTP∗

n = ˇ′Xn + εn > 0WTPn = 0 otherwise

(2)

here WTP∗n is the latent WTP for each household n that determines

he form of the observed WTPn distribution (note that no restric-ions are placed on the range of WTP*, i.e. WTP∗

n ∈ (−∞, +∞)). Westimate separate models of WTP to avoid the full and partial ban

wtwwl

able 2verage WTP to avoid a logging ban.

WTP full ban

All respondents Po

Mean 25.89 44Standard deviation 49.27 57Significantly different from zero at 5%? Yes YeMedian 10 30

ote: All values in RMB per mu per year

NFPP ‘not a problem’ 47.22 42.22NFPP ‘is a good thing’ 44.44 44.44Total 100 100

sing this specification. However, we also wish to allow for theossibility that the decisions about WTP for the two levels of banre not made independently. In order to do this, we use a bivariateobit model to estimate WTP to avoid the full and partial ban as aingle system of equations.

WTPFULLn = WTPFULL∗

n if WTPFULL∗n = ˇ′Xn + εn > 0

WTPFULL∗n = 0 otherwise

WTPPARTn = WTPPART∗

n if WTPPART∗n = ˛′Zn + �n > 0

WTPPARTn = 0 otherwise

(3)

here

E[ ε| x, z] = E[ �| x, z] = 0Var[ ε| x, z] = Var[ �| x, z] = 1Cov[ε, �

∣∣x, z] = �

The vectors X and Z include the variables that determine theatent continuous variables and ˇ′ and ˛′ are their associatedarameter vectors. The terms ε and � denote the disturbances ofach decision.

esults

eterminants of WTP

The results of the models estimated for WTP to avoid the fullnd partial logging bans are presented in Table 4, along with theescriptive statistics for each of the explanatory variables.

The first category of explanatory variables contains the socio-conomic and demographic characteristics of the household. Inoth the univariate and bivariate models these are largely not sig-ificant, although WTP to avoid the full ban is positively correlatedith the level of education in the household in both models. In

ddition, keeping livestock increases the WTP to avoid the partialan. The second category of determinants of WTP contains vari-bles that indicate whether the household has ways of dealing withhe risk of environmental damage to their house or cropland otherhan the ban on logging. These include income from employmentnd other non-farm sources, and the extent to which the house-old has access to credit. We find that income from other sourcesoes not affect preferences regarding the NFPP, but that households

hich are able to borrow more tend to have a higher WTP to avoid

he ban, and are therefore less supportive of it than householdsith less access to credit. If we assume that the ability to borrowhen necessary provides a form of insurance against unexpected

oss of income, then these results are as we would expect.

WTP partial ban

sitive responses All respondents Positive responses

.45 10.53 41

.96 22.07 40.74s Yes Yes

0 30

K. Mullan et al. / Land Use Pol

Tab

le4

Det

erm

inan

tsof

WTP

toav

oid

ban

onlo

ggin

g.

Des

crip

tive

stat

isti

csU

niv

aria

teTo

bit

mod

elB

ivar

iate

Tobi

tm

odel

Mea

n(S

D)

Full

ban

Part

ialb

anFu

llba

nPa

rtia

lban

Log

like

lih

ood

−317

.77

−198

.60

−485

.36

�2

stat

isti

c21

.70

29.9

222

.13

Obs

erva

tion

s91

9191

Log

ofto

talh

ouse

hol

din

com

e(R

MB

/yea

r)9.

35(0

.74)

4.05

1(1

9.10

)−3

.353

(9.9

13)

3.71

1(2

1.86

)−2

.969

(10.

95)

Nu

mbe

rof

adu

lts

inth

eh

ouse

hol

dw

ith

mor

eth

anp

rim

ary

edu

cati

on1.

99(1

.43)

9.56

3(5

.726

)*3.

672

(3.2

82)

10.5

4(6

.260

)*3.

941

(3.4

86)

Du

mm

yfo

rw

het

her

hou

seh

old

keep

sli

vest

ock

0.64

(0.4

8)−1

2.21

(16.

01)

24.4

6(9

.702

)**−1

7.66

(17.

59)

24.4

7(1

0.33

)**

Age

ofh

ouse

hol

dh

ead

47.4

0(1

1.16

)−0

.891

8(0

.806

9)−0

.656

1(0

.461

4)−1

.018

(0.8

872)

−0.7

974

(0.4

958)

Inco

me

from

off-

farm

emp

loym

ent

(RM

B/y

ear)

8129

.78

(117

36.2

9)0.

0006

3(0

.000

95)

0.00

0217

8(0

.000

5265

)0.

0009

839

(0.0

0107

8)0.

0003

666

(0.0

0057

49)

Inco

me

from

oth

ern

on-f

arm

sou

rces

(RM

B/y

ear)

485.

82(1

787.

50)

0.00

367

(0.0

0570

)0.

0043

32(0

.002

997)

0.00

3346

(0.0

0616

2)0.

0047

24(0

.003

180)

Am

oun

th

ouse

hol

dca

nbo

rrow

(%of

tota

lass

etva

lue)

1.79

(4.7

9)4.

749

(2.2

72)**

4.62

9(1

.187

)***

4.89

2(2

.458

)**4.

65(1

.253

)***

Esti

mat

edva

lue

offa

mil

yh

ouse

(RM

B)

1295

2.98

(156

56.9

1)−0

.000

997

(0.0

0048

0)**

−0.0

0007

74(0

.000

2657

)−0

.001

399

(0.0

0057

35)**

−0.0

0023

73(0

.000

3051

)D

um

my

for

wh

eth

erh

ouse

hol

dh

asag

ricu

ltu

rall

and

of‘h

igh

’pro

du

ctiv

ity

0.11

(0.3

1)−5

2.85

(26.

35)**

−27.

98(1

6.52

)*−5

8.39

(28.

92)**

−30.

37(1

7.26

)*

Du

mm

yfo

rw

het

her

hou

seh

old

has

stee

ply

slop

ing

fore

stla

nd

0.89

(0.3

1)−1

3.15

(21.

39)

−21.

27(1

1.87

)*−1

1.32

(24.

02)

−18.

78(1

2.99

)A

vera

gem

atu

rity

ofti

mbe

rfo

rest

invi

llag

e2.

57(0

.64)

−9.2

7(1

3.09

)6.

182

(7.4

49)

−11.

49(1

4.57

)7.

415

(8.2

06)

Cor

rela

tion

ofer

ror

term

s(�

)1.

114

(0.3

608)

***

*Si

gnifi

can

tat

10%

.**

Sign

ifica

nt

at5%

.**

*Si

gnifi

can

tat

1%.

asaomhvftitactctf

giasw1fadom

dborb

E

isdtmWtafbwb

temttib

nh

icy 28 (2011) 402–412 409

The third category includes variables indicating the value ofssets at risk of damage if overharvesting results in local soil ero-ion. The most likely assets that would be damaged would begricultural land, which may either deteriorate gradually over timer be lost rapidly if mudslides occur, and the family home, whichay be damaged if mudslides occur. We include whether the

ousehold has agricultural land of ‘high’ quality, and the estimatedalue of their house.9 We find that for the full ban, the value of theamily house is negatively and significantly related to WTP, andhe presence of high productivity agricultural land has a negativempact on WTP to avoid both the full and partial ban. This implieshat those households with higher value assets at risk of damagere less willing to pay to avoid the ban. For some households thisould be due to the fact they simple rely less on forestry (and henceheir lower or zero WTP reflects ‘indifference’) while for others itould reflect households who anticipate a benefit from the NFPP inhe form of a reduction in the likelihood of soil damages resultingrom overharvesting.

The final category contains variables that indicate the risk ofradual erosion or mudslides occurring as a result of overharvest-ng. These variables are the slope of the households’ forest lands reported by the survey respondents on a scale from 1 = steeplyloped to 3 = not sloped; and the average maturity of forests in thehole village, as reported by the village leader on a scale from= young growth to 4 = fully-mature. The expectation is that where

orest land is more steeply sloping the risk of damage is higher,nd where the village tends to have mature forest land the risk ofamage will be lower. We find that the slope of the forest land isnly significant as a determinant of the partial ban in the univariateodel, although it has the appropriate sign in all of the models.All in all, we find that the models in Table 4 offer a good fit to the

ata and that the estimated parameters are generally in line withehavioural expectations. This provides an added internal checkf the validity of experimental design since the stated behaviouralesponses are shown to be consistently and coherently explainedy key regressors.

xpected WTP

In order to more accurately assess the net household welfarempacts of the NFPP we then estimated expected conditional mea-ures of WTP. As explained above these measures more accuratelyeal with the large number of zero WTP responses in the calcula-ion of net welfare impacts. Table 5 shows the conditional mean and

edian values of predicted WTP estimated from the Tobit models.e also include the summary statistics for comparison. Although

he simple mean WTP to avoid the full ban on logging is positivend significant, the conditional mean is not significantly differentrom zero, and the conditional median is negative. For the partialan, in which limited amounts of timber can be cut for own use,e find that the conditional mean and median values of WTP are

oth negative and significantly different from zero.The results of zero WTP for the full ban on logging, and nega-

ive WTP to avoid the partial ban indicate that households do notxperience or anticipate net welfare changes as a result of the for-er policy, but anticipate a welfare gain from the latter. Based on

he framework described in the Compensation for regulation sec-ion, an explanation for this is that households are experiencingmplicit compensation from the restrictions placed on their neigh-ours. As the full logging ban does not increase the welfare of the

9 This value was estimated by the household, with further questioning whereecessary, e.g. ‘How much would it cost if you were to buy or build an equivalentouse today?’.

410 K. Mullan et al. / Land Use Policy 28 (2011) 402–412

Table 5Expected net WTP to avoid the logging ban.

Mean (SD) Significantly different from zero? Median

21

−1

fvrbolTbarh

C

uoUwTimctuqltf

dtnpplHvrflpinpitfrisubwtbo

pTtNpwpholttwtiatthiilh

oWbttCetntsi(hNdsfit

vtttpb

Summary statistics Full banPartial ban

Expected net conditional WTP from Tobit models Full banPartial ban

orest communities, they would not have voluntarily stopped har-esting timber in the absence of the regulation. However, from ouresults we can infer that they do not require compensation eitherecause the losses they experience as a result of the prohibitionn timber harvesting are offset by the environmental gains for theocal community (i.e. net welfare loss is (statistically equal to) zero).his, along with the negative results for the WTP to avoid the partialan, suggests that the forest-based households were experiencingcollective action problem to some degree. In the absence of free-

iding, we would have expected to observe a reduction in timberarvesting by all households, even if not complete cessation.

onclusions

The key concern of this paper is who should bear the costs of nat-ral resource conservation. This will be determined by the detailsf the policy mechanisms used to achieve conservation outcomes.nder traditional protected areas or regulatory restrictions, thoseho were previously using the resources will experience losses.

he alternative is that resource users are compensated for changesn their behaviour through regulation with side-payments, or Pay-

ents for Ecosystem Services. We have conceptualised this as ahoice between rights to use the resource of interest versus rights tohe external benefits of conservation. The introduction of new reg-lation involves a reallocation of those rights, and gives rise to theuestion of whether there should be compensation for those who

ose. We distinguish between two alternative scenarios of regula-ion that restrict property rights, each with different implicationsor compensation of the parties concerned.

This framework was used to assess the reasons for the intro-uction of the NFPP in China as well as the case for compensatinghe affected local forest-based communities. In the first of the sce-arios, such regulation would be solving a local collective actionroblem. In the absence of any government intervention, it isossible that relevant communities could have solved this prob-

em themselves, as it would have been in their interest to do so.owever, the incentives for individuals to free-ride can often pre-ent cooperation. Furthermore, we argue that due to the relativelyecent introduction of individual property rights to agricultural andorest land, local institutions for solving collective action prob-ems arising from individual households exercising their privateroperty rights are less developed in China than elsewhere. This

ncreased the need for national level intervention. Within this sce-ario, regulation may reduce the rights of individuals over theirroperty, but that loss is non-compensable because there is already

mplicit compensation due to the reduction in external costs forhe whole community. In other words, each individual gains morerom the restrictions on the rights of others than they lose as aesult of the restriction placed on themselves. The second scenarios more familiar from debates over regulatory takings. Changes inocial preferences result in higher demand for environmental reg-lation. In this scenario, asymmetry in the distribution of costs and

enefits means that one group bears the costs of the regulation,hile a separate group experiences the benefits. In this situation,

he case for compensation is not a given. However, payments maye desirable for equity reasons or may reduce the transactions costsf implementing the regulatory change.

mvpit

5.89 (49.27) Yes 100.53 (22.07) Yes 01.859 (36.23) No −0.7930.43 (23.85) Yes −8.284

In this paper, we examined whether the first scenario at leastartially describes the experiences of those affected by the NFPP.his was achieved by developing a stated preference experimenthat allowed us to estimate the average net welfare impacts of theFPP on forest-based households to determine whether these wereositive or negative. We found that the net effect on households’elfare of a complete logging ban was negative (WTP to avoid wasositive) but not significant. This implies that although the house-olds might not have voluntarily introduced a ban on the basisf the local impacts, they have received implicit compensation forosses in land-use rights, in the form of local environmental benefitshat offset the welfare impacts of those losses. In addition, we foundhat when we proposed a partial logging ban, where householdsould be permitted to harvest very limited quantities of timber for

heir own use only, the expected net welfare impacts were pos-tive (WTP to avoid was negative). This indicates that although

full ban would not be voluntarily chosen by forest households,here does appear to have been some degree of overharvesting athe local level. In addition, we found that those who potentiallyad most to lose from environmental damages due to overharvest-

ng were more in favour of the ban on logging. We conclude thatn the absence of free-riding, harvesting levels would have beenower than they in fact were, and that some intervention to reducearvesting would be welfare improving for those affected.

Our conclusions differ somewhat from some previous studiesn the NFPP (Xu et al., 2006; Cao et al., 2010; Miao and West, 2004;eyerhaeuser et al., 2005). This is because the focus has largely

een on the rights lost by forest-based households. However, bothhe qualitative and quantitative results from this paper show thathey have also experienced benefits. In a separate region of China,ao et al. (2010) find that while around half of households experi-nced income losses from the NFPP, 65% of all land-users said thathey supported the logging ban. Our results thus substantiate theeed to look at overall net welfare impacts. One caveat to this is thathe losses of income from timber experienced by households in oururvey region have been relatively small due to past overharvest-ng of timber and expansion in alternative off-farm opportunitiesMullan et al., 2010). There is also evidence that in some cases,ouseholds have even experienced increases in income under theFPP (Liu et al., 2010; Mullan et al., 2010). However, these aloneo not necessarily suggest welfare improvements, since there areignificant non-monetary costs and benefits of shifting labor fromorestry to off-farm employment in particular. This increases themportance of looking at welfare changes as well as income changeso assess the overall impacts of regulations.

In relation to the question of compensation for regulatory inter-entions more generally in the developing world, we concludehat where collective action problems are not being addressed athe local level, central government regulation may be necessaryo achieve local Pareto improvements. In countries where privateroperty rights are long established, regulation is more likely toe used primarily for redistributive purposes, and compensation

ay therefore be justified. However, where the institutions for

oluntary agreement between individuals over the use of privateroperty are less developed, certain regulations will be welfare

mproving for all affected. In these cases, compensation for limi-ations placed on property rights may no longer justifiable.

se Pol

circo(puii

A

CoStWnP

R

A

A

A

A

AB

B

B

B

B

B

B

B

C

C

CC

C

D

D

D

E

G

GH

I

K

K

L

L

L

M

M

M

M

M

MM

M

N

NN

N

O

P

P

P

P

P

R

R

R

R

S

S

S

K. Mullan et al. / Land U

Lastly, our analysis has implications for one of the most topi-al discussions underway in China: in a climate of unprecedentedntense economic development and dynamic changes in propertyights there are increasing calls originating from academia, policyircles and local media for compensation to be afforded in a rangef regulatory interventions akin to the NFPP that limit individualformal or informal) property rights without removing them com-letely. Our paper shows that in cases such as these, there is not oneniversal answer to the question of compensation, but that instead

t is necessary to look in more detail at the type of regulation andts impact on particular communities.

cknowledgments

We would like to acknowledge the financial support of the Chinaouncil for International Cooperation on Environment and Devel-pment as well as the assistance of the School of Environmentalciences of Beijing University in implementing the survey used inhis paper and particularly the help received by Ms. Tao Wendi.

e are also grateful for the comments received by Prof. Jeff Ben-ett, Prof. Erwin Bulte, Dr. Ben Groom, Dr. Shinwei Ng, Prof. Davidearce, Prof. Jerry Warford, and Prof. Jintao Xu.

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