Application of Choice Experiment to Value Improved Wetland Attributes: The Case of Wetlands around Jimma Town South Western Ethiopia

Abstract

Though Boye and Kitto wetlands have critical roles in providing a range of ecological and socio-economic benefits, due to increasing anthropogenic disturbances, notably through agriculture, settlement, intensive grazing, expansion of huge infrastructures, and brick making they are changing in to mosaic of small habitats. On ground of such threats and rapid degradation of the wetlands’ resources, the urgent need to manage this unique ecosystem is necessary. However, decision makers cannot take management decisions based on intuition alone, they need facts and values to feed the decision making process. Though other types of values are often important, economic values are useful to consider when making economic choices. For these wetlands various benefits are not recognized so far; particularly economic value of the wetlands remains largely unexplored. Against this back drop this study investigates whether peoples of the nearby community located around the wetlands are willing to pay higher charge for improvements in fish stock abundance and water purification attributes by assuming that other attributes affecting environmental quality of the wetlands held constant. In this study choice experiment method (CE) was selected in preference to CVM because it has the ability to disaggregate wetland improvements into underlying attributes. The study carried out a Choice experiment among 120 randomly selected household heads of the nearby community to estimate the value of improvement of the wetlands quality in terms of the attributes selected. The data was analyzed using logistic regression model and derive important issues concerning the preferences of households. Results confirm that the nearby communities of the two wetlands have high levels of environmental concern and are willing to pay for the improvement of the wetlands in terms of the attributes selected. The mean WTP for fish stock improvement was estimated to be 5.04 ETB, and for improvements in water purification it was 2.05 ETB. According to this result the most preferred attribute is fish stock and therefore the most urgent action is to prevent further depletion of the fish stock and increasing its abundance. Ordered logit regression was employed to capture how socio economic characteristics of the respondents modify the effects of attributes on the probability of choice. The regression model result revealed that among the variables used only educational level of the respondent’s modifies the effects of attributes on the probability of choice. Compensating surplus estimates which reflect overall willingness to pay for a change from the status quo to alternative improvement scenarios were also calculated. The estimate for the high impact improvement scenario was estimated to be 18.78 ETB, for medium impact improvement scenario-1 39.6 ETB and for medium impact improvement scenario-2 it was17.3 ETB. The total benefits derived from three wetland management scenarios are aggregated over the sampling frame. The net benefit estimates reveal that welfare maximization is achieved under the medium impact improvement scenario-1(311,968.8 ETB), which provides higher levels of Fish stock and buffer strip with sedge meadow to be planted at swath of 50 feet. The value derived from these wetlands’ improvement scenarios is a way to estimate wetland ecosystem benefits to people and allows financial experts to carry out a Cost-Benefit analysis. Cost-Benefit analysis compares the benefits and costs to society of improvements to manage the wetland ecosystems. However, this is beyond the scope of this study. One important implication drawn from the study is that this partial or rapid economic valuation might be enough to show trends or give an overview of the situation and be a valuable input from economic valuation to the decision making process targeted at sustainable management of the study wetland.