Households’ willingness to pay for soil conservation on communal lands: application of the contingent valuation method in north eastern Ethiopia

Abstract

Currently, soil erosion is one of the most serious environmental problems in Ethiopia. Therefore, this study was initiated with the objective of examining the determinants of households’ willingness to pay (WTP) for soil conservation practice on communal lands and to estimate the aggregate welfare gain of the proposed conservation program in the study area. A multi-stage sampling technique was employed to select the target respondents. A double bounded contingent valuation survey with an open-ended follow-up question was conducted on 245 randomly selected rural households. A Bivariate probit model was used. The results show that factors such as the size of total livestock holding, perception, credit, extension contact and farm size near to communal land have a positive and statistically significant effect on households’ WTP, while dependency ratio, migration, and initial starting bid have a negative and significant effect. The aggregate benefit was estimated to be 2,262,386.83 labor days (135,743,209.8 Birr) per annum.