Seema Jayachandran, Princeton University

Money (Not) to Burn: Payments for Ecosystem Services to Reduce Crop Residue Burning

Abstract

Abstract: Particulate matter significantly reduces life expectancy in India. We use a randomized controlled trial in the state of Punjab to evaluate the effectiveness of conditional cash transfers (also known as payments for ecosystem services, or PES) in reducing crop residue burning, which is a major contributor to the region's poor air quality. Credit constraints and distrust may make farmers less likely to comply with standard PES contracts, which only pay the participant after verification of compliance. We randomize paying a portion of the money upfront and unconditionally. Despite receiving a lower reward for compliance, farmers offered partial upfront payment are 8-12 percentage points more likely to comply than are farmers offered the standard contract. Burning measures based on satellite imagery indicate that PES with upfront payments significantly reduced burning, while standard PES payments were inframarginal. We also show that PES with an upfront component is a cost-effective way to improve India's air quality.

Seema Jayachandran is a Professor of Economics and Public Affairs at Princeton University. Her research focuses on environmental conservation, gender equality, health, and other microeconomic topics in developing countries.

She serves on the board of directors of the Abdul Latif Jameel Poverty Action Lab (J-PAL) and leads J-PAL's gender sector. She is also co-director of the National Bureau of Economic Research's program in Development Economics and co-editor of the American Economic Journal: Applied Economics. In addition, she serves on CARE's board of directors.

Prior to joining Princeton, she was a faculty member at Northwestern University and Stanford University. She earned a PhD in economics from Harvard University, a master's degree in physics and philosophy from the University of Oxford where she was a Marshall Scholar, and a bachelor's degree in electrical engineering from MIT.

You can read more about Seema Jayachandran here

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