Estimating the Counterfactual Impact of Conservation Programs on Land Cover Outcomes: The Role of Matching and Panel Regression Techniques

Deforestation and conversion of native habitats continues to be the leading driver of biodiversity and ecosystem service loss. A number of conservation policies and programs are implemented—from protected areas to payments for ecosystem services (PES)—to deter these losses. Currently, empirical evidence on whether these approaches stop or slow land cover change is lacking, but there is increasing interest in conducting rigorous, counterfactual impact evaluations, especially for many new conservation approaches, such as PES and REDD, which emphasize additionality. In addition, several new, globally available and free high-resolution remote sensing datasets have increased the ease of carrying out an impact evaluation on land cover change outcomes. While the number of conservation evaluations utilizing ‘matching’ to construct a valid control group is increasing, the majority of these studies use simple differences in means or linear cross-sectional regression to estimate the impact of the conservation program using this matched sample, with relatively few utilizing fixed effects panel methods—an alternative estimation method that relies on temporal variation in the data. In this paper we compare the advantages and limitations of (1) matching to construct the control group combined with differences in means and cross-sectional regression, which control for observable forms of bias in program evaluation, to (2) fixed effects panel methods, which control for observable and time-invariant unobservable forms of bias, with and without matching to create the control group. We then use these four approaches to estimate forest cover outcomes for two conservation programs: a PES program in Northeastern Ecuador and strict protected areas in European Russia. In the Russia case we find statistically significant differences across estimators—due to the presence of unobservable bias—that lead to differences in conclusions about effectiveness. The Ecuador case illustrates that if time-invariant unobservables are not present, matching combined with differences in means or cross-sectional regression leads to similar estimates of program effectiveness as matching combined with fixed effects panel regression. These results highlight the importance of considering observable and unobservable forms of bias and the methodological assumptions across estimators when designing an impact evaluation of conservation programs.