Smallholder Farmer’s Willingness to Pay for Improved Soil and Water Conservation Practice: A Contingent Valuation Study in Abaro- Toga Watershed Ethiopia
This paper estimates the mean willingness to pay of smallholder farmers for improved soil and water conservation practices using a contingent valuation method with a Double Bounded Dichotomous Choice technique followed by open-ended questions were applied. Seemingly unrelated Bivariate probit and Probit regression models were applied to determine the mean and factors affecting willingness to pay for soil and water conservation practice, respectively. Data were collected from 150 randomly selected smallholder farm households through a structured questionnaire and focus group discussions using face-to-face interviews. The study shows that the majority of the sample households has been affected by erosion problems because of deforestation, high intensity of rainfall, the slope of the land and the watershed shares common catchment with Abro Mountain. The econometric result shows that the mean and total willingness to pay from double bound elicitation method was computed 36.08 Birr/year and 1,336,873 Birr/year (1 US$=20.8 Birr) for five years respectively, while the mean and total willingness to pay from open ended elicitation method was computed at 26.39 Birr/year and 974,097.08 Birr per year. The mean annual willingness to pay for soil and water conservation from double bound elicitation method was greater than from open ended elicitation method. Hence, policy makers should target double bounded elicitation method than open ended elicitation method to eliciting the willingness to pay for soil and water conservation activity. This study empirically proved that households’ age, household size, education, income, total livestock unit, slop of land, perception and initial bids, are the key determinants of soil and water conservation activities.
Contingent Valuation Method, Willingness to Pay, Soil and Water Conservation, Double Bounded, Dichotomous Choice
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