Economic valuation of reducing upland forest resources degradation to improve soil and water conservation services: the case of upland forest resources of rekame watershed, halaba special woreda, snnpr, Ethiopia

In this study by using contingent valuation instrument an attempt was made to compute economic value of reducing upland forest resources degradation to improve soil and water conservation services in ETB and Labor Days contribution methods. The study is based on empirical data collected from 369 valid sample respondents living in the downstream communities vulnerable to the problems from the degraded upland forest area. Most respondents have given positive response for the project. In the study Probit and OLS models were used. Probit model was employed to estimate the parametric mean and aggregate WTP and also to determine factors affecting the WTP amounts from single bounded dichotomous choice format whereas OLS model was employed to determine factors affecting the maximum WTP amounts from the open ended question format. The mean WTP values were estimated using parametric and Non-Parametric approaches. The annual parametric mean WTP amounts were found to be ETB117.216 and 96.864 Labor days whereas the non-parametric mean WTP amounts were ETB110.4436 and 75.4478 Labor Days. Contrary to the mean WTP amounts from parametric approach, the mean WTP amounts from the non-parametric approach were from the households own feeling response and not affected by the disturbance term. Thus, the five years aggregate WTP amounts of this study were preferably ETB 6,951,871.2 and 4,749,060 Labor Days (equals ETB 56,988,720 by the conversion factor of 12.00ETB/worker/day). This shows that in rural areas labordays contribution is the most preferred over cash. From the Probit mode variables: age, income, education, family size, bid amount, landing holding, distance, degree of vulnerability, off-farm income and livestock have shown significant effects. From the OLS model variables: age, income, livestock, education, landholding, family size and bid amount have shown significant effect for both contribution methods. Almost all the explanatory variables have the same direction in both models. Moreover, higher WTP amounts are indicative of the households’ willingness to reduce the upland forest resources degradation in the watershed system of Rekame. The estimated value represents only one part of the total economic values of the upland forest resources. There were no serious inconsistency problems between determinants from Probit and OLS models. This raises validity of this research work. Furthermore, integrating local communities’ participation in reducing the upland forest resources degradation to improve soil and water conservation services is unquestionably essential.