Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia

Shiferaw Teshale Erango

doi:doi:10.11648/j.ijber.20221104.16

| Peer-Reviewed

Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia

Shiferaw Teshale Erango

Published in International Journal of Business and Economics Research (Volume 11, Issue 4)

Received: 5 July 2022 Accepted: 16 August 2022 Published: 31 August 2022

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

Communities benefit from a variety of ecosystem services provided by watersheds, which are often provided for free. Although these services have no monetary value, their economic value is debatable. As a result, natural resources are not used to their full potential, resulting in watershed deterioration. As a result, the purpose of this study is to apply the Double Bounded contingent valuation method, followed by open-ended questions, to assess households' willingness to pay for the rehabilitation of the Horuwa watershed. The study focuses on analysing households' willingness to pay decisions in order to elicit smallholder households' willingness to pay in terms of cash and labour, as well as to investigate determinants that influence smallholder households' maximum willingness to pay. Tobit regression models were used to assess data acquired via questionnaires, focus groups, and face-to-face interviews from 170 randomly selected households. The results showed that the first response is shared by 74.7% of Yes and 25.3% of No responses for watershed conservation in the double bounded contingent valuation of sampled households. According to the Tobit model, education level, household size, and annual income had a significant and positive effect on maximum willingness to pay, whereas non-farm income and initial bid had a significant and negative effect. As a result, the findings of the study imply that a household's perception of total watershed resource degradation is linked to Willingness to Pay. The findings suggest that policymakers at both the national and local levels should consider education level, annual income, household size, non-farm income, and initial bid variables when designing watershed conservation practices.

Published in	International Journal of Business and Economics Research (Volume 11, Issue 4)
DOI	10.11648/j.ijber.20221104.16
Page(s)	250-256
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Contingent Valuation, Rehabilitation, Tobit, Watershed, Willingness to Pay

References

[1]	Aglanu, L. M. (2014). Watersheds and rehabilitations measures-a review. Resources and Environment, 4 (2), 104-114.
[2]	Astatike, A. A. (2016). Economic valuation of improved irrigation water in bahir dar zuria woreda, ethiopia. Economics, 5 (3), 46-55.
[3]	Birhane, M., & Geta, E. (2016). Determinants of farmers’ willingness to pay for irrigation water use: The case of Agarfa District, Bale Zone, Oromia National Regional State. Journal of Agricultural Economics and Rural Development, 3 (1), 073-078.
[4]	Bond, I. (2007). Payments for watershed services: A review of the literature. International Institute for Environment and Development, London, 1-17.
[5]	CSA, W. B., (2013). Ethiopian rural socio economic survey. Ethiopia.
[6]	Food and Agriculture Organization (FAO). 2007. The state of food and agriculture; Food and Agriculture Ecology and Society 15 (2): 4. Rome, Italy.
[7]	Green, S. B. (1991). How many subjects does it take to do a regression analysis. Multivariate behavioral research, 26 (3), 499-510.
[8]	Greene, W. H. (2008). Econometric Analysis. Sixth Edition New York University Pearson Education, Inc., publishing as Prentice Hall.
[9]	Gujarat, D. N. (2004). Basic Econometrics, Fourth Edition. The McGraw−Hill Companies.
[10]	GWFEDO, (2020). Gombora woreda finance and economy development office, the annual report. Gombora, Ethiopia.
[11]	Hanemann, W. M., & Kanninen, B. (1996). The statistical analysis of discrete-response CV data (No. 1557-2016-133027).
[12]	Hoyos, D., and Mariel, P. (2010). Contingent valuation: Past, present and future. Prague Economic Papers, 4 (2010), 329–343. doi: 10.18267/j.pep.380.
[13]	Kerr, J. (2002). Watershed development, environmental services, and poverty alleviation in India. World development, 30 (8), 1387-1400.
[14]	Long, J. S. (1997). Regression models for categorical and limited dependent variables (Vol. 7). Sage.
[15]	Maddala, G. S., & Lahiri, K. (1992). Introduction to econometrics (Vol. 2). New York: Macmillan.
[16]	Mayrand, K., & Paquin, M. (2016). Payments for environmental services: a survey and assessment of current schemes.
[17]	Postel, S. L., & Thompson Jr, B. H. (2005). Watershed protection: Capturing the benefits of nature's water supply services. In Natural Resources Forum (Vol. 29, No. 2, pp. 98-108). Oxford, UK: Blackwell Publishing, Ltd.
[18]	Stewart, J. (2013). Tobit or not Tobit? Journal of Economic and Social Measurement, 38 (3), 263–290.
[19]	Tisdell, C., & Wilson, C. (2002). Ecotourism for the survival of sea turtles and other wildlife. Biodiversity & Conservation, 11 (9), 1521-1538.
[20]	Wooldridge, J. M. (2002). Econometric Analysis of Cross Section and Panel Data. The MIT Press Cambridge, Massachusetts London, England.
[21]	Wunder, S. (2005). Payments for environmental services: some nuts and bolts.

Cite This Article

Plain Text BibTeX RIS

APA Style

Shiferaw Teshale Erango. (2022). Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia. International Journal of Business and Economics Research, 11(4), 250-256. https://doi.org/10.11648/j.ijber.20221104.16

Copy | Download

ACS Style

Shiferaw Teshale Erango. Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia. Int. J. Bus. Econ. Res. 2022, 11(4), 250-256. doi: 10.11648/j.ijber.20221104.16

Copy | Download

AMA Style

Shiferaw Teshale Erango. Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia. Int J Bus Econ Res. 2022;11(4):250-256. doi: 10.11648/j.ijber.20221104.16

Copy | Download

@article{10.11648/j.ijber.20221104.16,
  author = {Shiferaw Teshale Erango},
  title = {Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia},
  journal = {International Journal of Business and Economics Research},
  volume = {11},
  number = {4},
  pages = {250-256},
  doi = {10.11648/j.ijber.20221104.16},
  url = {https://doi.org/10.11648/j.ijber.20221104.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20221104.16},
  abstract = {Communities benefit from a variety of ecosystem services provided by watersheds, which are often provided for free. Although these services have no monetary value, their economic value is debatable. As a result, natural resources are not used to their full potential, resulting in watershed deterioration. As a result, the purpose of this study is to apply the Double Bounded contingent valuation method, followed by open-ended questions, to assess households' willingness to pay for the rehabilitation of the Horuwa watershed. The study focuses on analysing households' willingness to pay decisions in order to elicit smallholder households' willingness to pay in terms of cash and labour, as well as to investigate determinants that influence smallholder households' maximum willingness to pay. Tobit regression models were used to assess data acquired via questionnaires, focus groups, and face-to-face interviews from 170 randomly selected households. The results showed that the first response is shared by 74.7% of Yes and 25.3% of No responses for watershed conservation in the double bounded contingent valuation of sampled households. According to the Tobit model, education level, household size, and annual income had a significant and positive effect on maximum willingness to pay, whereas non-farm income and initial bid had a significant and negative effect. As a result, the findings of the study imply that a household's perception of total watershed resource degradation is linked to Willingness to Pay. The findings suggest that policymakers at both the national and local levels should consider education level, annual income, household size, non-farm income, and initial bid variables when designing watershed conservation practices.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia
AU  - Shiferaw Teshale Erango
Y1  - 2022/08/31
PY  - 2022
N1  - https://doi.org/10.11648/j.ijber.20221104.16
DO  - 10.11648/j.ijber.20221104.16
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 250
EP  - 256
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20221104.16
AB  - Communities benefit from a variety of ecosystem services provided by watersheds, which are often provided for free. Although these services have no monetary value, their economic value is debatable. As a result, natural resources are not used to their full potential, resulting in watershed deterioration. As a result, the purpose of this study is to apply the Double Bounded contingent valuation method, followed by open-ended questions, to assess households' willingness to pay for the rehabilitation of the Horuwa watershed. The study focuses on analysing households' willingness to pay decisions in order to elicit smallholder households' willingness to pay in terms of cash and labour, as well as to investigate determinants that influence smallholder households' maximum willingness to pay. Tobit regression models were used to assess data acquired via questionnaires, focus groups, and face-to-face interviews from 170 randomly selected households. The results showed that the first response is shared by 74.7% of Yes and 25.3% of No responses for watershed conservation in the double bounded contingent valuation of sampled households. According to the Tobit model, education level, household size, and annual income had a significant and positive effect on maximum willingness to pay, whereas non-farm income and initial bid had a significant and negative effect. As a result, the findings of the study imply that a household's perception of total watershed resource degradation is linked to Willingness to Pay. The findings suggest that policymakers at both the national and local levels should consider education level, annual income, household size, non-farm income, and initial bid variables when designing watershed conservation practices.
VL  - 11
IS  - 4
ER  -

Copy | Download

Author Information

Shiferaw Teshale Erango

Department of Agricultural Economics, College of Agricultural science, Wachemo University, Hossana, Ethiopia

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Shiferaw Teshale Erango. (2022). Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia. International Journal of Business and Economics Research, 11(4), 250-256. https://doi.org/10.11648/j.ijber.20221104.16

Copy | Download

ACS Style

Shiferaw Teshale Erango. Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia. Int. J. Bus. Econ. Res. 2022, 11(4), 250-256. doi: 10.11648/j.ijber.20221104.16

Copy | Download

AMA Style

Shiferaw Teshale Erango. Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia. Int J Bus Econ Res. 2022;11(4):250-256. doi: 10.11648/j.ijber.20221104.16

Copy | Download

@article{10.11648/j.ijber.20221104.16,
  author = {Shiferaw Teshale Erango},
  title = {Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia},
  journal = {International Journal of Business and Economics Research},
  volume = {11},
  number = {4},
  pages = {250-256},
  doi = {10.11648/j.ijber.20221104.16},
  url = {https://doi.org/10.11648/j.ijber.20221104.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20221104.16},
  abstract = {Communities benefit from a variety of ecosystem services provided by watersheds, which are often provided for free. Although these services have no monetary value, their economic value is debatable. As a result, natural resources are not used to their full potential, resulting in watershed deterioration. As a result, the purpose of this study is to apply the Double Bounded contingent valuation method, followed by open-ended questions, to assess households' willingness to pay for the rehabilitation of the Horuwa watershed. The study focuses on analysing households' willingness to pay decisions in order to elicit smallholder households' willingness to pay in terms of cash and labour, as well as to investigate determinants that influence smallholder households' maximum willingness to pay. Tobit regression models were used to assess data acquired via questionnaires, focus groups, and face-to-face interviews from 170 randomly selected households. The results showed that the first response is shared by 74.7% of Yes and 25.3% of No responses for watershed conservation in the double bounded contingent valuation of sampled households. According to the Tobit model, education level, household size, and annual income had a significant and positive effect on maximum willingness to pay, whereas non-farm income and initial bid had a significant and negative effect. As a result, the findings of the study imply that a household's perception of total watershed resource degradation is linked to Willingness to Pay. The findings suggest that policymakers at both the national and local levels should consider education level, annual income, household size, non-farm income, and initial bid variables when designing watershed conservation practices.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Households’ Willingness to Pay for Rehabilitation of Horuwa Watershed: The Case of Gombora District, Hadiya Zone, Southern Ethiopia
AU  - Shiferaw Teshale Erango
Y1  - 2022/08/31
PY  - 2022
N1  - https://doi.org/10.11648/j.ijber.20221104.16
DO  - 10.11648/j.ijber.20221104.16
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 250
EP  - 256
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20221104.16
AB  - Communities benefit from a variety of ecosystem services provided by watersheds, which are often provided for free. Although these services have no monetary value, their economic value is debatable. As a result, natural resources are not used to their full potential, resulting in watershed deterioration. As a result, the purpose of this study is to apply the Double Bounded contingent valuation method, followed by open-ended questions, to assess households' willingness to pay for the rehabilitation of the Horuwa watershed. The study focuses on analysing households' willingness to pay decisions in order to elicit smallholder households' willingness to pay in terms of cash and labour, as well as to investigate determinants that influence smallholder households' maximum willingness to pay. Tobit regression models were used to assess data acquired via questionnaires, focus groups, and face-to-face interviews from 170 randomly selected households. The results showed that the first response is shared by 74.7% of Yes and 25.3% of No responses for watershed conservation in the double bounded contingent valuation of sampled households. According to the Tobit model, education level, household size, and annual income had a significant and positive effect on maximum willingness to pay, whereas non-farm income and initial bid had a significant and negative effect. As a result, the findings of the study imply that a household's perception of total watershed resource degradation is linked to Willingness to Pay. The findings suggest that policymakers at both the national and local levels should consider education level, annual income, household size, non-farm income, and initial bid variables when designing watershed conservation practices.
VL  - 11
IS  - 4
ER  -

Copy | Download