The Application of Contingent Valuation Method to Community-Led Financing Schemes: Evidence from Rural Cameroon

Abstract

A key decision problem facing several programme officers of many donor agencies in developing countries like Cameroon, is how to price intended financing schemes for community participation. This paper provides further evidence on how useful the contingent valuation method (CVM) can be for such pricing decision problems facing these organizations. In this regard, a case study was conducted by a non-governmental organization(NGO) to elicit the willingness-to-pay (WTP) values, for an intended community-based financing scheme aimed, at introducing new variety of fish species (Tilapia nilotica and Heterotis niloticus) into the Bamendjim dam reservoir located in the Ndop area of the Northwest Province of Cameroon for long-term fish productivity. To assess the theoretical underpinning of the study, we used a censored Tobit model . The results show that factors such as household income, the level of education attained by household heads, occupational status of household heads, payment mechanism and the hypothetical prices used in the elicitation format (referendum format) can influence the propensity of community members to pay more for such a proposed scheme. However, the study recommends that it would be important for NGO's to compare the CVM results with the actual cost of financing the schemes.