Economic Valuation Natural Forest: The Case of Sheka Forest, South West Ethiopia

Abstract

The main objective of this study is to estimate the economic value of Sheka forest, one of the natural forests located in Southern Nations, Nationalities, and Peoples (SNNP) Regional State of Ethiopia. It has a potential to contribute towards the economic development of the region. To estimate conservation value of Sheka forest, contingent valuation method (CVM) were employed by using double-bounded dichotomous choice format. To estimate mean willingness to pay and to identify determinants of household’s willingness to pay probit model and seemingly unrelated bivariate probit model were employed. To measure household’s maximum willingness to pay for forest conservation Tobit model were used. The result showed that 94.91% of households were willing to pay for the conservation of Sheka forest. As a result, the mean maximum willingness to pay was 47.97 ETB. The households mean willingness to pay for Sheka forest was found to be 39.07ETB from probit model, 39.65 and 58.51ETB from bivariate probit first and second equation respectively.

Keywords: Willingness to Pay, DBDC, SUBPM, Tobit, Probit