Economic valuation of ecosystem services: application of a choice experiment approach on mount Guna services, North West of Ethiopia

Abstract

Guna Mountain is the highest point with an elevation of 4,113 m above sea level and located in South Gondar Zone. It is surrounded by Estie, Lay Gayint, Begemidir Guna, and Farta Woredas and served as a source of livelihood for the nearby communities. However, the area of Mount Guna has been still unprotected because of a lack of suitable conservation measures and weak control of inappropriate practices. Moreover, empirical investigations on the value of the mountain in terms of its ecosystem service are scanty available. This study aims at valuing ecosystem services of Guna Mountain using the choice experiment method and hence identifying farmer's choices of ecosystem service attributes. By considering farmers' preferences, watershed protection service, harvesting of medicinal plants, and water supply together with the cost of management attribute were identified as ecosystem service attributes. Primary data were collected from randomly selected respondents and the Random Parameter Logit model (RPL) was employed for estimation. Results of this model revealed that revealed that the signs of attribute levels are positive except for watershed protection service level 25%, and harvesting of a medicinal plant 20%. In addition to this, socioeconomic variables were significant such as family size and farm distance with a negative sign, education, and land size with a positive sign. The estimated MWTP from the basic model of RPL for non-monetary attribute levels were Ethiopian Birr (ETB)11During the study period, 2019: 1$ = 27 Ethiopian Birr (ETB). 8.575 and 175.526 per household per year for watershed protection service level 25% and watershed protection service level 50%. It was ETB 1.190 and 24.487 per household per year for the harvesting of a medicinal plant at 10% and harvesting of a medicinal plant at 20%. The contribution was ETB 116.868, 112.042, and 26.776 for water supply at two seasons of the year, water supply at three seasons of the year, and water supply for all seasons of the year attribute levels respectively. Valuing watershed protection was more than water supply followed by harvesting of medicinal plants attribute. To improve the quality and quantity of protection and water supply service, the government and farmers should work together.