Francisco Alpízar

Policy Implications and Analysis of the Determinants of Travel Mode Choice: An Application of Choice Experiments to Metropolitan Costa Rica

In this paper we study a group of policies aimed at discouraging the use of private transportation during peak hours, both directly and indirectly, by increasing the attractiveness of the only available substitute, the bus. This is done using a choice experiment constructed to find the answer to the following basic question: Given fixed house-to work structures and no working hour flexibility, by how much is the choice of travel mode for commuters to work sensitive to changes in travel time, changes in costs for each mode and other service attributes? This information is then used to identify the most suitable combination of policies dealing with air pollution and congestion in the typical developing country context of metropolitan Costa Rica. We also provide estimates of the value of travel time as a measure of the potential benefits gained from reduced congestion.

Fuel Tax Incidence in Developing Countries: The Case of Costa Rica

Although fuel taxes are a practical means of curbing vehicular air pollution, congestion, and accidents in developing countries - all of which are typically major problems - they are often opposed on distributional grounds. Yet few studies have investigated fuel tax incidence in a developing country context. We use household survey data and income-outcome coefficients to analyze fuel tax incidence in Costa Rica. We find that the effect of a 10 percent fuel price hike through direct spending on gasoline would be progressive, its effect through spending on diesel - both directly and via bus transportation - would be regressive (mainly because poorer households rely heavily on buses), and its effect through spending on goods other than fuel and bus transportation would be relatively small, albeit regressive. Finally, we find that although the overall effect of a 10 percent fuel price hike through all types of direct and indirect spending would be slightly regressive, the magnitude of this combined effect would be modest. We conclude that distributional concerns need not rule out using fuel taxes to address pressing public health and safety problems, particularly if gasoline and diesel taxes can be differentiated.

Changing the deforestation impacts of Eco-/REDD payments: Evolution (2000-2005) in Costa Rica's PSA program

Costa Rica’s PSA (Pagos por Servicios Ambientales) environmental services payments, started in 1997, were the pioneers. Broadly cited, they have led to numerous suggestions that others emulate the PSA approach. Yet the PSA program has itself evolved over time. Following earlier work (Sanchez et al. 2007 and Pfaff et al. 2008 on PSA 1997-2000), we can evaluate here whether a change in implementation changes impacts on deforestation. Examining the PSA forest-protection contracts during 2000 and 2005, we find that less than 5 in 1000 (about 0.4%) parcels enrolled in the program would have been deforested annually without payments. To first order, this matches the 1997-2000 findings of low deforestation impact and may be explained by.low agricultural returns relative to those in ecotourism as well as by other conservation policies including the forestry law of 1996. However, there are differences in results which are instructive. First, the overall impact is in fact slightly higher than in 1997-2000; despite net reforestation, more deforestation took place and thus the PSA had a bit more land-use change to prevent. More important for upcoming policies such as global carbon payments, the shifts in PSA implementation eliminated the bias of the PSA payments towards lands that are relatively unprofitable and thus unlikely to be cleared even without payments. Thus we can see that even within the same country for the same basic policy idea, the details of implementation do matter. In this and other settings significant potential gains can be realized by increased targeting.

The Effect of Risk, Ambiguity and Coordination on Farmers’ Adaptation to Climate Change: A Framed Field Experiment

The risk of losses of income and productive means due to adverse weather associated to climate change can significantly differ between farmers sharing a productive landscape. It is important to learn more about how farmers react to different levels of risk, under measurable and unmeasurable uncertainty. Moreover, the costs associated to investments in reduced vulnerability to climatic events are likely to exhibit economies of scope. We explore these issues using a framed field experiment that captures realistically the main characteristics of production, and the likely weather related losses of premium coffee farmers in Tarrazu, Costa Rica. Given that the region recently was severely hit by an extreme, albeit very infrequent, climatic event, we expected to observe, and found high levels of risk aversion, but we do observe farmers making trade-offs under different risk levels. Although hard to disentangle at first sight given the high level of risk aversion, we find that farmers opt more frequently for safe options in a setting characterized by unknown risk. Finally, we find that farmers to a large extent are able to coordinate their decisions in order to achieve a lower cost of adaptation, and that communication among farmers strongly facilitates coordination.

Effects of Exclusion from a Conservation Policy: Negative Behavioral Spillovers from Targeted Incentives

A critical issue in the design of incentive mechanisms is the choice of whom to target. For forests, the leading rules are (1) target locations with high ecosystem-service density; (2) target additionality, i.e., locations where conservation would not occur without the incentive; and, (3) at least effectively reward previous private choices to conserve forest. We use a field experiment to examine the changes in contributions to forest conservation when we introduce each of these selection rules. For individuals who are selected, we find that targeting additionality (rule 2) is the only scheme to increase contributions. However, that selection rule intentionally excludes those who contributed most previously, and it is the only one to generate significant “behavioral leakage,” i.e., negative spillovers or a decrease in contributions by those who are excluded (and who face no price or income changes). Our results demonstrate a tradeoff in targeting and a challenge for optimal policy design.

A Contingent Valuation Approach to Estimating Regulatory Costs: Mexico's Day Without Driving Program

Little is known about the cost of environmental regulations such as residential zoning restrictions and recycling mandates that target households instead of firms, partly because of significant methodological and data challenges. We use a survey-based approach, the contingent valuation method, to measure the costs of Mexico City’s Day Without Driving program, which seeks to stem pollution and traffic congestion by prohibiting vehicles from being driven one day each week. To our knowledge, ours is the first study of an actual regulation to use this approach. We find that the Mexican program’s costs are substantial: up to US

Retos ambientales de Costa Rica

103 per vehicle per year, about 1 percent of drivers’ annual income. Recent research has questioned whether programs for driving restrictions in Mexico City and several other megacities actually have environmental benefits. Our results suggest that whatever benefits these programs may have, they can be quite costly.

It took thousands of turtles

Este reporte presenta una resena del panorama ambiental de Costa Rica. En el se detallan los principales desafios del pais para lograr un crecimiento inclusivo, resiliente y sostenible, incluyendo el reto de cumplir con los compromisos climaticos adquiridos en los Acuerdos de Paris. Finalmente, se plantean alternativas estrategicas que harian viable cumplir con las metas planteadas y solventar los mayores retos de Costa Rica en materia de desarrollo compatible con el ambiente.

Environmental and development issues in Latin America: moving forward

At the end of my undergraduate studies in economics I was ready to go into graduate studies in finance, monetary policy or macroeconomics. At that time in my country, the choices were not much broader than that. In order to complete my studies I needed 30 days of community work, so I went to Ostional National Wildlife Refuge (ONWR), one of a few places in the world where sea turtles come to nest in massive numbers. My task was to craft a set of rules and incentives for the local community to organize better around the unique resources of this protected area.

How much do we care about absolute versus relative income and consumption

For the most part, economic research in Latin America has had a ‘macro’ orientation (e.g., economic growth, monetary and fiscal policy, hyperinflation crisis). This is perfectly understandable because of the macro instability that has affected the entire region for decades and that still remains in many places. However, the composition of research is gradually changing as more attention is paid to a wider set of problems. Nowadays we see an increasing number of researchers in the region focusing on a variety of economic problems dealing with health, education, poverty alleviation, competition policy and the protection of natural resources and pollution control, among many others. This special issue of Environment and Development Economics presents a small sample of four research papers on these latter topics by researchers in established academic institutions in the region.