Labor as a Payment Vehicle for Valuing Soil and Water Conservation Practice: An Application of Contingent Valuation Method in Abaro- Toga Watershed, Southern Ethiopia

Abstract

This paper examines the determinants of farmers' willingness to pay (WTP) for soil and water conservation (SWC) practices applied Contingent Valuation Method  in terms of labor contribution in Abaro-Toga Watershed.  The paper is based on analysis of data collected from 150 randomly selected households through face to face interview. Descriptive statistics and econometrics logit models were applied. Results of the study showed that most respondents were WTP for SWC practices because of severity of soil erosion problem. Response to the hypothetical scenario revealed that sampled households expressed their mean WTP to be 36.01 labor days per year with an aggregate benefit of 1334247 labor days per year which is equivalent to 23349329.8 Birr. While, from the open ended elicitation methods total WTP was computed at mean of 32.21 labor days per year with an aggregate benefit of 1193449.3 labor days per year which is equivalent to 20885362.76 birr (1 US$=20.8 birr). This indicated that the total WTP from double bound elicitation format is greater than the WTP from open ended question. Hence, policy makers should target double bounded elicitation method than open ended elicitation method to eliciting the WTP for SWC practice. The results of logistic regression analysis also show that farmers' decisions to participate in SWC practices are influenced by a host of factors (Age, HH size, education, income, sex, slop of land, number of livestock holding, perception, labor shortage, and bid value). The implication is that taking these factors into account while planning SWC measures enables policy makers to come up with projects that win acceptance by the local people.

Keywords: Determinants ,Soil and water conservation,  Logit,  Contingent valuation, willingness to pay