Costa Rica's Program of Paymentsfor Environmental Services (Pago de Servicios Ambientales,PSA) provides a unique opportunity to evaluate directpayments as a conservation policy tool. This paper reportsevidence on how much more forest has been conserved in CostaRica as a result of PSA contracts with landowners. Suchevidence requires estimating a counterfactual outcome: howmuch forest would have been preserved if there had been nopayments. By applying rigorous program evaluation methodsthat have been recommended for identifying the causaleffects of conservation policies, we find that the PSAprogram does result in a small but statistically significantincrease in the area of forest conserved.