Determinants of forest dependent household’s participation in payment for ecosystem services: Evidence from Plantation Establishment Livelihood Improvement Scheme (PELIS) in Kenya

Payment for ecosystem service (PES) programs are increasingly being promoted as suitable mechanisms for addressing degradation of forest resources in developing countries. While interest in PES has grown over the last decade, empirical research on factors influencing household involvement in PES remains limited. This paper analyses factors influencing household participation in a forestry PES scheme in Kenya. Drawing on a cross sectional survey of 919 households in Mt Elgon, Kenya, we estimate a household participation index (PI) in the Plantation Establishment Livelihood Improvement Scheme (PELIS) program based on involvement in nine key program activities. We then run a Heckpoisson model to determine factors that affect household participation in the PES program. The results show that while the level of participation was medium (with nearly 50% of eligible households participating), involvement was higher among the wealthier and male headed households. The intensity of participation across PELIS activities was above average (reflected in a participation index of 5.3 out of a maximum nine). The key factors associated with participation were access to forest benefits (products and share of PELIS income) and having a positive attitude towards environmental conservation. The access to different forms of household capitals was found to have varying influence on participation, depending on household socioeconomic context. While ownership of livestock had a positive influence on participation, the effect of farm size and off-farm income was negative. Equally, the level of expected crop harvests had a negative influence on participation suggesting presence of incentive incompatibility among some benefits. Our findings have three important implications. First, the low level of participation among the women and poor, and resultant disproportionate distribution of benefits suggests the need for mechanisms to reduce program costs and other barriers that limit participation of the poor and marginalized groups. Second, the varying influence of household capitals point to the importance of taking into consideration gender and other socio economic contexts when designing and implementing PES programs. Lastly, considering that PELIS can only enrol a limited number of participants, PES programs may need to expand the range of incentives in order to accommodate more beneficiaries.