Economic Valuation of Soil Conservation in Highlands of Hadiya Zone of Ethiopia: The Case of Soro Woreda Ajacho Watershed

Abstract

This study was conducted to explore household’s willingness to pay for soil conservation practices in Soro Woreda Hadiya Zone Ethiopia. The objective of this study was, to investigate economic valuation of soil conservation in the Soro Woreda Ajacho watershed. The study employed double bounded dichotomous format of contingent valuation method was to elicit respondents’ WTP for improved soil conservation practices in terms of labor contribution. Data collated from 321 household heads was used for analysis. Both probit and bivariate model were estimated. Probit model was employed to assess the determinants of willingness to pay. Results of the model showed that family size of respondents, labour shortage, farm land size, education level of the household head and income positively and significantly affected the willingness to pay of the respondents while the level of bids negatively and significantly affected willingness to pay for soil conservation practices in the study area. The study also showed that the mean willingness to pay estimated from the Double Bounded Dichotomous Choice and open ended formats were computed at 137.81 and 78.82 person days per annum, respectively. The respective total aggregate value of soil conservation in the study area was computed to be 2,406,532 (36,097,980 ETB) and 4,207,615 (63,114,225 ETB) per annum for five years, respectively. The survey results implied that most of the respondents have perceived the problem of soil erosion and were willing to pay for conservation practices. As policy implications, an effort would be needed to strengthen literacy, increase farmers’ understanding about the importance of soil conservation practices and credit facilities, increase numbers of extension office to minimize the time of farmers to contact development agent workers.

Keywords: Soil Conservation; Probit; Bivariate; Perception; Willingness to Pay.