Economic valuation of urban forest using contingent valuation method: The case of Hawassa city, Ethiopia

Abstract

Urban forests are a significant and essential, but frequently ignored, component of urban landscapes. In many cases, only the resource's commercial value is taken into account when developing policies. To this end, the contingent valuation method (CVM) was applied to evaluate the economic value of urban forest parks (UFPs) in Hawassa City. This paper is estimating households’ maximum willingness to pay (WTP) for urban forest parks (UFPs) and identifying factors affecting households’ (HH's) WTP for conservation and development UFPs using double bounded (DD) CVM. The data was analyzed using a bivariate probit and probit model. Using the double bounded and open ended (OE) strategy choices, it was found that the communities' joint WTP was worth 23,209,329.6 Ethiopia Birr (ETB) and 14,761,008 ETB, respectively. The cost of conservation and development of UFP was found to be 1,696,000 ETB. According to the research, age, sex, marital status, family size, income, ownership status, education level, and bid amount have significant impact on the project's WTP. In general, the study showed that residents might gain approximately (23,209,329.6 - 1,696,000ETB) 21,513,329.6 ETB as a welfare enhancement by comparing the cost of conservation and development of UFPs with their benefits; consequently, such projects would benefit them more. As a result, the government should place greater emphasis on its UFP policies and projects. Besides, specific socioeconomic aspects should be considered when developing a project or policy for the conservation and development of UFPs in urban areas.