Links: [pdf] [code] [doi]

Abstract: We study the implementation of a time-varying pricing (TVP) program by a major electricity utility in Costa Rica. Because of particular features of the data, we use recently developed understanding of the two-way fixed effects differences-in-differences estimator along with event-study specifications to interpret our results. Similar to previous research, we find that the program reduces consumption during peak-hours. However, in contrast with previous research, we find that the program increases total consumption. With a stylized economic model, we show how these seemingly conflicted results may not be at odds. The key element of the model is that previous research used data from rich countries, in which the use of heating and cooling devices drives electricity consumption, but we use data from a tropical middle-income country, where very few households have heating or cooling devices. Since there is not much room for technological changes (which might reduce consumption at all times), behavioral changes to reduce consumption during peak hours are not enough to offset the increased consumption during off-peak hours (when electricity is cheaper). Our results serve as a cautionary piece of evidence for policy makers interested in reducing consumption during peak hours—the goal can potentially be achieved with TVP, but the cost is increased total consumption.

JEL classification: Q41, Q47, Q50

Keywords: dynamic pricing, energy, behavioral adjustments, LMICs

Links: [pdf] [online appendix] [doi]

Abstract: Using a spatially explicit framework with low/middle-income country coastal characteristics, we explore whether aspatial policies augment the impact of marine protected areas (MPAs) and identify when MPAs create income burdens on communities. When MPAs are small and budget-constrained, they cannot resolve all of the marinescape’s open-access issues, but they can create win-win opportunities for ecological and economic goals at lower levels of enforcement. Aspatial policies—taxes, gear restrictions, license restrictions, and livelihood programs—improve the MPA’s ability to generate ecological gains, and licenses and livelihood policies can mitigate MPA-induced income burdens. Managers can use MPA location and enforcement level, in conjunction with the MPA’s impact on fish dispersal, to induce exit from fishing and to direct the spatial leakage of effort. Our framework provides further insights for conservation-development policy in coastal settings, and we explore stylized examples in Costa Rica and Tanzania.

JEL classification: O13, Q22, Q56, Q57

Keywords: artisanal fishery, fishery management, leakage, marine protected areas, marine reserves, no-take zones, people–park conflict, spatial bioeconomic model, spatial prioritization

Links: [doi]

Abstract: The design of protected areas, whether marine or terrestrial, rarely considers how people respond to the imposition of no-take sites with complete or incomplete enforcement. Consequently, these protected areas may fail to achieve their intended goal. We present and solve a spatial bio-economic model in which a manager chooses the optimal location, size, and enforcement level of a marine protected area (MPA). This manager acts as a Stackelberg leader, and her choices consider villagers’ best response to the MPA in a spatial Nash equilibrium of fishing site and effort decisions. Relevant to lower income country settings but general to other settings, we incorporate limited enforcement budgets, distance costs of traveling to fishing sites, and labor allocation to onshore wage opportunities. The optimal MPA varies markedly across alternative manager goals and budget sizes, but always induce changes in villagers’ decisions as a function of distance, dispersal, and wage. We consider MPA managers with ecological conservation goals and with economic goals, and identify the shortcomings of several common manager decision rules, including those focused on: (1) fishery outcomes rather than broader economic goals, (2) fish stocks at MPA sites rather than across the full marinescape, (3) absolute levels rather than additional values, and (4) costless enforcement. Our results demonstrate that such naïve or overly narrow decision rules can lead to inefficient MPA designs that miss economic and conservation opportunities.

Keywords: additionality, bio-economic model, enforcement, leakage, nash equilibrium, no-take reserves, park efectiveness, reserve site selection, spatial prioritization, systematic conservation planning, marine spatial planning

Links: [doi]

Abstract: To ensure food security among rural communities under a changing climate, policymakers need information on the prevalence and determinants of food insecurity, the role of extreme weather events in exacerbating food insecurity, and the strategies that farmers use to cope with food insecurity. Using household surveys in Guatemala and Honduras, we explore the prevalence of food insecurity among smallholder farmers on both a recurrent (seasonal) and episodic (resulting from extreme weather events) basis, analyze the factors associated with both types of food insecurity, and document farmer coping strategies. Of the 439 households surveyed, 56% experienced recurrent food insecurity, 36% experienced episodic food insecurity due to extreme weather events, and 24% experienced both types. Food insecurity among smallholder farmers was correlated with sociodemographic factors (e.g., age, education, migration) and asset ownership. The factors affecting food insecurity differed between type and prevalence of food insecurity. Our results highlight the urgent need for policies and programs to help smallholder farmers improve their overall food security and resilience to extreme weather shocks. Such policies should focus on enhancing farmer education levels, securing land tenure, empowering women, promoting generational knowledge exchange, and providing emergency food support in the lean season or following extreme weather events.

Keywords: coping strategies, extreme weather events, food insecurity, Guatemala, Honduras, small-scale farming

Links: [pdf] [doi]

Abstract: This paper describes the adaptive responses of rural households and community-based drinking water organizations (CWOs) during seasonal droughts in Costa Rica. It empirically characterizes the adaptive measures used by 3,410 households and 81 CWOs in the driest area of the country. Volumetric pricing is a powerful adaptation option for managing water scarcity during these periods. However, these pricing schemes are not properly set to recover costs for adequate investment in water infrastructure. As a result, many CWOs rely on external financial support to cover these investments. The financial and governance restrictions characterizing most CWOs must be overcome in order to implement most of the adaptation measures identified for preparedness against seasonal drought. On the other hand, some rural households use water sources in addition to the tap water provided by CWOs (e.g. bottled water), as well as water-storing devices (e.g. buckets). The lack of effective adaptation of CWOs to water scarcity, expressed by unreliable piped-water systems, would probably lead to a higher use of these alternatives. This would entail higher costs to households, due to the time and resources invested in these activities. These costs and the potential additional costs on health represent the social costs of community failures to adapt to drier scenarios in existing piped-water systems.

Keywords: institutions, adaptation, climate change, governance, volumetric pricing

Links: [pdf] [doi]

Abstract: Costa Rica is considering expanding their marine protected areas (MPAs) to conserve marine resources. Due to the importance of households’ responses to an MPA in defining the MPA’s ecological and economic outcomes, this paper uses an economic decision framework to interpret data from near-MPA household surveys to inform this policy discussion. The model and data suggest that the impact of expanding MPAs relies on levels of enforcement and on-shore wages. If larger near-shore MPAs can produce high wages through increased tourism, MPA expansions could provide ecological benefits with low burdens to communities. Due to distance costs and gear investments, however, MPAs farther off-shore may place high burdens on off-shore fishers.

Keywords: enforcement, marine reserves, no-take zones, perceptions, tourism

Links: [pdf]

Abstract: With many countries seeking to increase the area conserved in marine protected areas (MPAs) to achieve the Convention on Biodiversity’s protected area targets by 2020, we employ a bioeconomic model to determine which configurations of MPAs that meet area targets perform the best for secondary goals, including fishing yield, rural income, fish stocks, and sea turtle conservation. Motivated by observations in the northern Caribbean coast of Costa Rica, the paper models the reactions of fishers to various MPA policies and the impact of policies on income and yield in two different communities, in addition to the impact on fish stock and turtle populations. This region’s tourism relies on wildlife observation, including sea turtle nesting, which links MPA conservation outcomes to on-shore wage opportunities such as turtle tour guides, but fishing activities can disrupt turtle reproduction. With artisanal fishers allocating time between fishing, traveling to fishing locations, and on-shore wage opportunities, the framework provides information about how the configuration of the MPA that achieves a target amount of MPA area affects turtle conservation and differentially affects two artisanal villages’ fishers. Overall, this analysis moves beyond achieving area targets to determine how different MPA configurations affect subsets of fishers, fish stocks, and turtle conservation.

Keywords: marine protected areas, fish stocks, turtles, Costa Rica