Heterogeneity preferences and willingness to pay for environmental services: Evidence from Iran

Abstract

Environmental challenges such as soil salinity and desertification have been concerns of Iran's agricultural sector in recent decades. Payment for ecological characteristics is one of the market methods of protection which has received much attention. One of the areas that have been plagued by such problems in the last decade is the aquifer of the Dasht-e-Abbas of Ilam province. This study examines the preferences and willingness to pay farmers to maintain and improve the aquifer of Dasht-e-Abbas. For this purpose, the choice experiment method and mixed logit and latent class models were used. The required information was obtained by completing a questionnaire and interviews with 108 farmers in 2021. The results obtained from both models confirmed the existence of heterogeneity in farmers' preferences, and the variables age, environmental orientation, and groundwater use were identified as heterogeneity factors. The mixed logit model and latent class results showed that the characteristics of reed level, soil salinity, and desertification have the highest priority from farmers' perspectives, respectively. The maximum willingness to pay for these two attributes has been 420 and 256 thousand Iran Rials per month per hectare. Based on the results, there is a need for the authorities to take effective action by holding extension classes related to the importance of the environment and the problems associated with this aquifer.