Estimating the impact of wildlife damage compensation policy on farmers’ incomes

Abstract

At present, the conflict between humans and wildlife in China is becoming more serious, and the wildlife damage compensation policy, as an important part of the ecological compensation system, has become an important means to alleviate the contradiction between wildlife protection and farm household development. This study empirically examines the mechanism of action and analyses the impact of the pilot wildlife damage compensation policy on farmers’ incomes, using Chinese provincial panel data from 2004 to 2021, and employing synthetic control methods, double difference models and moderated effects models. The results show that: (1) At the provincial level, the wildlife damage compensation policy can significantly increase farmers’ income by 16.7 %, which has been validated through a series of robustness tests. (2) Further analysis using micro-survey data shows that the wildlife compensation policy significantly increases farmers’ income by 22.5 %. (3) Mechanism analysis reveals that the wildlife damage compensation policy can increase rural agricultural employment by 4.3 %, thereby increasing farmers’ income. (4) Heterogeneity analyses indicate that wildlife damage compensation policy has different effects on farmers’ income. Among these, the impact on low-income farmers is more pronounced. Understanding the impact and heterogeneity of wildlife damage compensation policy on farmers’ income can facilitate the design of targeted compensation policies to address the mismatch between conservation and development, thereby achieving the policy objective of promoting a symbiotic coexistence between wildlife conservation and farmers’ economic interests.