Payments for Environmental Services (PES) is a method of attaching market value to environmental benefits which have typically not been valued in the marketplace. This thesis investigates the impact of the government hydrological services program in two communities in Oaxaca, Mexico. Using interviews, semi structured and household surveys, I investigate the effect the PSAH has had in alleviating poverty and increasing social capital in the communities as well as investigate willingness to accept (WTA) payment for additional PES programs. The PES payments put household incomes above national poverty lines. Social capital improved both within and between communities. WTA for additional PES depends on the use of the land in question. Overall, participation in the PSAH has had a positive impact in both communities.