Abstract:
This study was carried out to determine the economic value of forest by Wood work enterprises
for the reforestation of softwood Pine trees in Eastern Ethiopia, namely Dire Dawa
Administrative Council, Harari Regional State and Deder district (woreda) of East Hararghe
Zone. Forests in Eastern Ethiopia were the major sources of softwood Pine logs. Nowadays,
some of commercially important Pine species are over-exploited and in short of supply. The
study was undertaken with the objective of estimating Woodwork enterprises heads willingness
to pay in Dire Dawa, Harari and Deder district for the recovery of deforested softwood Pine
trees in m3 using a Contingent Valuation method in Double Bounded Dichotomous Choice
format. Seemingly Unrelated Bivariate Probit model was used to examine factors affecting
Woodwork enterprise heads WTP and to calculate the mean and aggregate WTP. To elicit their
WTP for reforestation, 136 sample Woodwork enterprise heads were randomly selected from
1076 enterprise heads and interviewed. Among these sample enterprise heads 87.5% of them
were willing to pay for the reforestation while others (12.5%) were not. The mean WTP of the
enterprise heads was ranged from Birr 97.92 to Birr 174 per month per person or Birr 1175.05
to Birr 2088 per m3 per year per person and the aggregate WTP was Birr 1264343.04 per m3 per
year and that could enable to reforest 88 hectare. From a total of 15 explanatory variables used
in the model, nine variables namely second bid value, family size, capital, perception, source
connection, profit, substitution, liability and distance turn out to be significant and all have the
expected sign. Softwood Pine trees forest is of high value and therefore, policy makers,
development practitioners and regional governments of the study areas in collaboration with the
federal government should use this opportunity to mobilize Woodwork enterprises to combat
softwood trees deforestation problem in the study areas by taking into account the study result
and significant variables that affecting respondents WTP for reforesting this valuable resource
