Modeling preferred future land use under certain condition (for process based decison making)

In this section, decisions of household farmers were explored under the condition of “if

supported by financial investment in the next 5 to 10 years.” Only two land-use choices,

i.e., rubber agroforest and monoculture rubber or oil palm plantations were frequently mentioned during the survey (see section 3.2.3) since the majority of the interviewed household heads were males. Because of cultural traditions in the study area, mainly one decision maker had to be interviewed. The problem thus arises whether there is a gap between the expressed decision and the implementation of the expressed decision. The expressed intention could be just wishful thinking, anticipated agreement with the other partner or a decision that will be implemented without further consulting. In the given cultural environment, we could assume the latter two cases. The following sub-

2

This sub-section was added as a result of the initial simulation and to strengthen the prospective element of the process-based decision making sub-model (see Chapter 6).

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sections identify the factors affecting the decisions of household agents according to household types.

Factors affecting preferred land uses of household type 1 (rubber-rice farmers) Chi-square tests show that the empirical Bi-logit model is highly significant (p < 0.003) in fitting the preferred land-use of rubber-rice farmers type (Table 3.11). A total of seven explanatory variables were identified. Based on these explanatory variables (if all are at their mean value), the probability of the households to choose rubber agroforest or monoculture plantations is summarized in Table 3.12.

Table 3.11 Explanatory variables used for Bi-logit regression model for land use of (household type 1 - rubber-rice farmers)

Variable Definition Rubber

agroforest

(constant) -41.58

(38.63)

Household characteristics

H_age Household head age -0.71

(0.47)

H_edu Household head education -24.96

(15.97)

H_incomep Household gross income per person -0.001

(0.0008)

Conservation agreement policy

H_ACT Household activities supporting conservation

agreement

-1.199 (0.74)

Environmental plot attributes

P_dtown Plot distance to town center (m) 15.25

(10.84)

P_dhouse Plot distance to house (m) -15.29

(11.07)

Neighborhood land use

P_F45 Enrichment factor of others (land use of 2005),

neighborhood radius = 270 m

-0.014 (0.0089)

Fitness and accuracy of the model:

Likelihood ratio test (chi-square statistics): -8.13*** df = 7 p = 0.0003 Pseudo-R2 = 0.78 (Nagelkerke); 0.58 (Cox and Snell); 0.62 (McFadden) Percentage correct predictions: Rubber agroforest: 88.9% (Cut point 50%) Others: 85.7%

Overall percentage: 87.5%

Notes: Numbers in parenthesis are standard errors of estimated preference parameters. ***, **, and * indicate statistical significance at the 0.01, 0.05 and 0.1 level, respectively. Other land uses (e.g., oil palm and rubber monoculture plantation) was selected as the base case for comparison.

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Table 3.12 Probabilities of preferred land use of household type 1 (rubber-rice farmers)

Land-use type Probability 95% Confidence interval*

Rubber agroforest 0.8665 0.5329 1.2002

Monoculture (rubber or oil palm)

0.1335 -0.2002 0.4671

Note: *Confidence interval is automatically calculated by STATA software using delta method.

Table 3.13 Explanatory variables used for Bi-logit regression model for land use of rubber –based farmers

Variable Definition Rubber agroforest

(constant) 4.14

(1.72)**

Household characteristics

H_age Household head age -0.73

(0.03)*

H_edu Household head education -1.12

(0.60)*

H_landholdings Household landholdings per person -0.67

(0.28)**

Conservation agreement policy

H_ACT Household activities supporting conservation agreement 0.17

(0.066)**

Neighborhood land use

P_F45 Enrichment factor of others (land use of 2005),

neighborhood radius = 270 m

-0.002 (0.001)**

Fitness and accuracy of the model:

Likelihood ratio test (chi-square statistics): -38.0447** df = 5 p = 0.003 Pseudo-R2 = 0.29 (Nagelkerke); 0.26 (Cox and Snell); 0.18(McFadden) Percentage correct predictions: Rubber agroforest: 60.0% (Cut point 50%) Others: 82.1%

Overall percentage: 71.6%

Notes: Numbers in parenthesis are standard errors of estimated preference parameters. ***, **, and * indicate statistical significance at the 0.01, 0.05 and 0.1 level, respectively. Other land uses (e.g., oil palm and rubber monoculture plantation) was selected as the base case for comparison.

Table 3.14 Probabilities of preferred land use of rubber –based farmers Land-use type Probability 95% Confidence interval*

Rubber agroforest 0.4748 0.3382 0.6114

Monoculture (rubber or oil palm)

0.5252 0.3886 0.6618

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Factors affecting preferred land uses of household type 2 (rubber-based farmers) Chi-square tests show that the empirical Bi-logit model is highly significant (p < 0.003) in fitting the preferred land-use of rubber-based farmers (Table 3.13). A total of five significant explanatory variables was identified.

The probability of the type 2 households to choose rubber agroforest or monoculture plantations is summarized in Table 3.14. The results of the probabilities of the two household types under the condition of financial investments suggests that type 1 agents, which are described as better-off households compared to type 2 households (see Section 3.3.1) are 87% (Table 3.12) likely to stay with rubber agroforest. On the other hand, type 2 households take slightly more risks regarding more profitable land- use practices (e.g., monoculture plantations with 52% probability) (Table 3.14). In both cases, rice paddies were not preferred. The probable reason is that the survey was mainly done with male household heads. These are largely responsible for rubber and oil palm productions, whereas females are solely responsible for rice production. This mainly gender-specific aspect is a known confounder in this modeling that one could adjust.

3.4 Conclusions

The heterogeneity through categorization (Brown and Robinson 2006) is presented in this part of the study. The results of the PCA and KCA reveal the household typologies in the study area, namely (1) rubber-rice farmers (household type 1) and (2) rubber- based farmers (household type 2). In other research in land-use decision making, the conventional way has been to aggregate the household agents. However, in this study, the disaggregation (or heterogeneity) of the household agents is justified due to the differences in the factors such as land (i.e., rubber agroforest area vs. rice field area), income composition, labor pool, etc., which were generated by PCA.

Most of the factors affecting land-use choice are combinations of human, financial, social and natural capital and the impact of policy that affects the households’ activities, i.e., conservation agreement. Highly significant new variables were found to influence the household agents’ decision making that had not yet been considered in other MAS models, i.e., enrichment factor of land-use types. The coefficients generated for each household agent are incorporated in the LB-LUDAS model for the land-use

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decision making under the baseline scenario. However, the preferred land use of household agents if supported by financial investment was modeled for the agents’ process-based decision making. The application of this as a new layer of the agents’ decision making is an adjustment to address the cause-effect relationship mechanism and unknown confounder (in this case is the decision-making process, see Chapter 6). Also, it is noteworthy to consider this aspect, since the probability of choosing certain land uses changes significantly according to a given situation or condition.

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4 NATIONAL AND LOCAL PAYMENTS/ REWARDS FOR

ENVIRONMENTAL SERVICES (P/RES) SCHEMES IN RUBBER