Ecological compensation policies use economic incentives to influence stakeholders' choices. These policies aim to achieve a win-win solution that can improve regional ecosystem services and residents' wellbeing. Many studies have assessed the effectiveness of ecological compensation policies, but most of them focused on the improvement of ecosystem services. In contrast, relatively fewer studies have examined the influences of ecological compensation policies on residents' well-being and how they feed back to residents' decisions. In this study, we reviewed studies that assessed ecological compensation policies based on scientific questions and major indicators. We found that the critical research question lies in the coupling relationships among ecological compensation, farmers' wellbeing, and ecosystem services. Based on the review, we developed a comprehensive theoretical framework that includes three main indexes for evaluating ecological compensation policies:ecosystem services, farmers' livelihoods, and cost-effectiveness. Accordingly, we argue that appropriate methodology and modeling that consider both natural and human systems are crucial for future studies assessing ecological compensation policies.