Valuing soil erosion control investments in Nigerian agricultural lands: A hedonic pricing model

Abstract

The effects of climate change are often writ large in the nexus of water and land. In Nigeria, predominantly rainfed agriculture is confronting the consequences of climate extremes in the form of excessive rainfall, especially in the southern region. Relatedly, the hazard of soil erosion represents one of the most pressing forms of land degradation, thereby threatening agricultural production and farmers’ livelihoods. The objective of this analysis is to estimate the economic value of investing in a climate change adaptation strategy, specifically soil erosion control measures on agricultural lands in Nigeria. The analysis employs a hedonic pricing model, using household-level self-reported land values from the Nigeria Living Standards Measurement Survey, 2015–2016 and 2018–2019. Results indicate that undertaking soil erosion control facilities is heavily capitalized into Nigerian agricultural land values. The estimated marginal implicit price (MIP) for undertaking soil erosion control is approximately 26% of mean land values. This value represents around half the annual nominal median income of a Nigerian agrarian household. The estimated MIP of soil erosion control adoption is positive in areas that experience moderate rainfall. Results are maintained across a variety of robustness checks. Our findings suggest that soil erosion control adoption can be an important source of wealth creation among smallholder farmers who are mainly engaged in subsistence farming. Results support wider adoption of erosion control by landowners in accordance with highly variable weather patterns, and more broadly suggest the need to recognize the long-term gains from climate-smart agriculture (CSA) practices and target investment aid towards sustainable agriculture.