Household’s Allocation of Payment for Ecosystem Services in “La Antigua” Watershed, Veracruz, México

Abstract

Payment for ecosystem services (PES) is an environmental policy looking to improve ecosystem conservation and well-being. Assets have been used to evaluate socioeconomic outcomes of the program; however, the allocation of PES at a household level and its explaining variables have not been addressed. Thus, the aim of this article is to study the allocation of PES in nondurable and durable goods and the determinants of this household decision. Results from the La Antigua watershed located in Mexico indicate that the PES program is primarily used in durable goods, mainly on health, house infrastructure, agricultural inputs, and reforestation. Econometric models show that this allocation to one or several assets depends on the average age of the household head, on participation in a community organization, and on the average income. In contrast, government transfers are not significant. Based on this, policy recommendations are made related to the program’s socioeconomic outcomes and alignment with other conditional cash transfer.