Payment vs. compensation for ecosystem services: do words have a voice in the design of environmental conservation programs?

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16 January 2017
By CEE-M

We examine whether and how word choice can affect individual perceptions about a proposed Payments for Ecosystem Services (PES) program when objective outcomes are similar. From a traditional economic perspective, this type of manipulation would be considered unlikely to affect perceptions and behaviour, especially in the presence of pecuniary incentives and repeated decisions among sophisticated agents. From a behaviourally informed perspective, however, psychological and political theories of wording argue that word choice can have a significant impact on economic behaviour. To substantiate this discussion, we conduct a survey experiment that tests the impact of the words ‘payment’ and ‘compensation’ on favorability ratings of a proposed PES program. These preliminary findings suggest that the words used to describe public policies can be influential non-pecuniary interventions.