Determinants of Farmers’ Willingness to Pay for Blue Nile River Protection: The Case of Gilgel Abay River Mouth, Ethiopia

Abstract

The paper examines the determinants of farmer’s willingness to pay for protection of Abay River. This study employed Contingent Valuation Method with a double bounded elicitation format followed by open ended questions. A total of 158 randomly selected households were interviewed. Descriptive statistics and Econometrics Models particularly Probit and Seemingly Unrelated Bivariate Probit models were applied. Result of the study showed annual income, education, number of dependents in the household, family size, total cultivated land, extension contact, and community bylaw were determinant variables of farmers WTP in cash. Response to the hypothetical scenario revealed that the mean WTP in cash is 74.22 ETB per year per household with an aggregate value of 171,411.09 ETB per annum (1US$=28.3birr). In addition, extension contact and age of the respondents were important variables in determining labor contribution. While the mean labor WTP for household to be 17.46 labor days per year with an aggregate benefit of 41,291 labor days per year which is equivalent to 2,477,460 ETB Birr ( daily labor payment is 60 birr/per day). This indicates that aggregate WTP in labor is greater than cash payment. Therefore, the government should engage farmers in labor during River protection. Besides, socioeconomic and institutional variables should also be considers while deign river protection.

Keywords: Blue Nile River, improved river protection, Contingent valuation method, Willingness-to-Pay, Ethiopia

DOI: 10.7176/CER/11-12-04

Publication date: December 31^st 2019