Economic Valuation of Local Environmental Amenities: A Case Study of Bahir Dar City, Amhara Regional State, Ethiopia

Abstract

This study estimates the economic value of local environmental amenities in Bahir Dar city which is one of the tourist attraction sites in Ethiopia. The study employed choice experiment valuation method by identifying four environmental amenities attributes (Lake Tana, urban park, palm tree and street cleanliness). The study used probability multi-stage random sampling technique. The analysis was based on primary data surveyed from households in Bahir Dar city. The study presented nine choices set for each respondent; each choice set has three alternatives including the status quo option. The study employed a mixed logit model. The result showed that all improved attribute levels have positive signs and statistically significant. As expected and consistent with economic theory the monetary cost has negative signs and significant. The mixed logit model showed that there is preference heterogeneity in some attribute levels. Based on the finding, the study recommends that the city administration and the concerned body expected to implement the hypothetical policy scenario so as to improve environmental amenity.