Abstract:
Watershed provides vast economic benefits within and beyond the management area of
interest. But most watersheds in Ethiopia are increasingly facing the threats of degradation
due to both natural and man-made causes. Inappropriate natural resource use and lower
adoption of watershed management practices are major persisting causes of its degradation.
To reverse these problems, communities’ participation in sustainable management program is
among the necessary measures. Hence, this study assessed the households’ willingness to pay
for watershed management practices through a contingent valuation study approach. Double
bounded dichotomous choice with open-ended follow-up format was used to elicit the
households’ willingness to pay. Based on data collected from 275 randomly selected
households, descriptive statistics results indicated that most households (79.64%) were willing
to pay for watershed management practices. Bivariate Probit model was employed to identify
determinants of households’ willingness to pay and estimate mean willingness to pay. Its
result shows that age, gender, income, livestock size, perception of watershed degradation,
social position and offered bids were important variables affecting willingness to pay for
watershed management practices. The study also shows that the mean willingness to pay for
watershed management practices was calculated to be 58.41 Birr and 47.27 Birr per year
from double bounded and open-ended format, respectively. The study reveals that the
aggregate welfare gains from watershed management practices were calculated to be
931581.09 Birr and 753909.23 Birr per year from double bounded dichotomous choice and
open-ended format, respectively. Therefore, the policymakers should make households to pay
for the services of watershed management practices in the study area.
