Studying monetary incentive programs and their impact on social norms

MSU AgBioResearch scientists explore the intersection of cultural values and financial incentives to protect the environment.

Environmental conservation has been a controversial issue around the world for decades. Attitudes and opinions on the importance of conservation vary, in large part, because of unique cultural differences. To combat
environmental challenges, governments have introduced a number of financial incentive programs for those who participate in protecting nature. These initiatives were created to preserve the environment, but they don’t come without questions.

Why do some view protecting natural resources as an important part of their cultural identity, even without financial incentives? What happens to other reasons for environmental protection when financial incentives are introduced? What are the long-term impacts on the social system when the incentive money runs out? These are questions that Michigan State University (MSU) AgBioResearch scientists Maria Lapinski, John Kerr and Jinhua Zhao want to answer.

“We come at this project in very different ways, so we’ve had to develop an interdisciplinary model that encompasses a number of variables,” Kerr said. “The turning point of the project was a three-day retreat, where the team tried to take a look at finding a way to serve all of our interests. That’s when we began developing a model that takes the social, economic and environmental factors into account.”

Lapinski, a communication scientist in the Department of Communication, and Kerr, a researcher with a focus on economics from the Department of Community Sustainability, have been working on a project in Sanjiangyuan, China, a region in the Qinghai Province on the Tibetan Plateau. Alongside Jinhua Zhao, an MSU AgBioResearch scientist and researcher in the Department of Agricultural, Food and Resource Economics, they are studying how financial incentive programs influence behavior and social norms.

The location of the project was determined when Zhao introduced Lapinski and Kerr to Lu Zhi, a professor of conservation biology at Peking University in China. Zhi is the founder of the Shan Shui Conservation Center and a world-renowned giant panda and snow leopard researcher. Sanjiangyuan will soon be a part of China’s payment for ecosystems services program. It is ecologically important because it holds the headwaters of Asia’s three largest rivers: the Yellow, the Yangtze and the Mekong.

Close to 1 million people inhabit the region, with roughly 90 percent being ethnic Tibetans and having a strong tie with Tibetan Buddhism. Interviews conducted by the project team found that inhabitants have depended on herding sheep and yaks for years, which, along with their cultural beliefs, has created a desire to live harmoniously with nature. This was found in the first phase of the project, which included interviews with 80 nomadic herders.

“These payments for ecosystems services happen all over the world, including right here in Michigan,” Lapinski said. “What we know from financial research is that once you start incentivizing certain behavior with money, it can change the way people think about that behavior. We know that money can erode psychological motivation and attitudes, but we know less about how money can change the whole social system and what we call social norms.”

Phase two of the project involves household surveys that yield quantitative data, such as measures of social norms and responses to hypothetical scenarios, as well as income and education levels. The data will represent how social norms, coupled with financial incentives, affect conservation behaviors, with a particular focus on grazing management and protection against illegal hunting. Data is being collected currently.

In the summer of 2016, the final phase, which includes field experiments, will take place. These studies will simulate the introduction of financial incentive programs while accounting for cultural context and social norms about herding and illegal hunting.

“In the experiment phase, we want to really understand how they feel about conservation and how that changes when an incentive program is introduced,” Kerr said. “We started the project with experiments on campus with MSU students dealing with cooperation. Individuals were placed in a group setting with four people and put in a scenario where they have to take an action that is best for them or best for the group. We introduced variables in the second phase, such as adding an incentive to cooperate that made it at least as beneficial to cooperate as not cooperate. In the third phase, we took that payment away.”

Lapinski is unsure if the findings from the initial experiments at MSU will translate to China.

“One of the things we found in the first experiments was that financial incentives can erode the power of norms,” Lapinski said. “In other words, we sometimes feel pressure to do what others are doing, but when financial incentives are involved, that tends to be less of a factor in decision making. One of the interesting things about the next phase is that we’re taking this to a new culture. We aren’t sure if we’ll find the same things, but we have some insights into what can happen.

“If there is money from a government entity or a nonprofit, it will run out, so what happens then? Our prediction is that if you introduce a financial incentive, it will erode positive social norms once that incentive is taken away. That’s what we’re looking at and what we want to include in our experiments next summer. Then we can take the last step and think about how payment programs can be designed to avoid ruining existing social norms.”

The project is funded by the National Science Foundation’s Interdisciplinary Behavioral and Social Sciences Research competition, in addition to the Sustainable Michigan Endowed Partnership at MSU.

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