Resources, Energy and Environmental Markets Laboratory (REEML)


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Fourth year students' research projects

Fourth year thesis projects


A number of fourth year students choose to apply the methods of experimental economics in their research projects. Examples from 2010 include the projects of Sam Skidmore and Nick Ross who conducted experiments in field settings to examine questions about the economics of development.

Sam Skidmore in Indonesia underneath a waterfall with locals.

Sam Skidmore
Thesis supervisor: Paulo Santos
Topic: Reducing Emissions from Deforestation and Forest Degradation (http://www.un-redd.org/):
“Seeing REDD: A Microeconomic Analysis of Land Use Contracts in Central Sumatra.”

The aim of the project is to establish a supply curve regarding individuals willingness to accept to alter land use from low to high carbon sequestration uses (monoculture rubber to fruit-based Agro-forestry).

  • What is the equivalent price per tonne (of Carbon) when villagers change their land use?
  • Is it only a direct opportunity cost that is required to change these land uses. I.e. does the payment required only equate to the difference in expected profits from the change in land use?
  • How do these prices compare to current carbon prices?
  • How do preferences and other attributes affect their WTA to alter their land use?
Deforestation in Indonesia. Intact forest in Indonesia. Bridge across river to village in Indonesia.
Sam Skidmore running an REDD auction in Indonesia. Photo courtesy of Sam Skidmore.

Sam's data collection

The required data was collected by means of a survey/questionnaire to collect detailed information about individuals’ agricultural plots, relevant socio-economic conditions, capital and labour constraints, and time preferences. This research was complemented by two experiments (1) a group risk preferences experiment and (2) a silent auction.

Nick Ross at a celebration. Photo courtesy of Nick Ross.

Nick Ross
Thesis supervisor: Paulo Santos
Topic: Decision-making about the adoption of new crop varieties in Laos

Farmers in Natai Village in Lao PDR have cultivated the same varieties of sticky rice for generations, developing subjective beliefs for future seasons given experience growing them in the past. A new variety, VND 95-20, is a non-sticky rice used for industrial purposes which offers a higher yield on average and a higher price per kg. With little or no growing experience, farmers are yet to know what the new variety may yield under different conditions.

My field experiments sought to answer the question: Does a farmer decide to continue growing sticky rice because at least he has some knowledge of its yield given a good or bad season? That is, do elicited Ambiguity preferences (preferences between prospects with known and unknown probabilities) have siginicant effects on the adoption of new technology? Although previous field experiments have suggested risk aversion reduces the likelihood of adoption, research examining the role of ambiguity and farmer adoption is minimal.

Nick Ross measured villagers risk preferences using a whiteboard. Photo courtesy of Nick Ross.

Nick's data collection

During July 2010, I stayed in Natai Village (in the central Lao province of Khammouane) to conduct a household survey and field experiments designed to measure the risk and ambiguity preferences. All experiments were conducted with visual aids to assist comprehension and ensure subjective probabilities. Farmers could win up to 40,000 Kip (Equivalent to approx 2 days income) in all games, ensuring salient responses and avoiding hypothetical bias.