Sensitivity to scope of environmental regulation in contingent valuation of forest cutting practices in Finland

This study applies contingent valuation in measuring the environmental benefits of a forest regeneration cutting policy that is designed to encourage cutting practices in Finland to take environmental concerns into account. This study examines the benefits of the program, which regulates landowners to follow environmentally-oriented cutting practices either in limited or extensive scope. The dichotomous choice between status quo and environmentally-oriented cutting is found to be insensitive to the scope of the environmental alternative, as the scope variable was insignificant in the logit model. Even though, the truncated means of willingness to pay did not differ between the levels of scope, the overall means were statistically different. The measurement of respondents’ beliefs indicated that the negative side effects of the extensive program, e.g. beliefs about unemployment effects or restricted operating freedom, were one reason for insensitivity.