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Economic value of wetlands services in the Central Rift Valley of Ethiopia

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Abstract

This study estimates the economic values of wetlands services in the Central Rift Valley of Ethiopia. A choice experiment valuation method was used to quantify monetary value of wetlands. The study used data collected from 405 households complemented with data collected using Participatory Rural Appraisals. Multinomial logit and random parameter logit models were used to analyze the data. The results have demonstrated the economic values of wetlands in the study area. Households ascribe the highest value for biodiversity (marginal willingness to pay value of US $1.26 per percentage of biodiversity conserved), followed by water availability (US $0.87 per ha increase in open water surface area). The statistical inferences, however, showed significant heterogeneity among households in their preference for wetland management alternatives. The probability of choosing improved wetland management is significantly reduced by age of the household head and distance; while, it is increased by education, income and location. The finding also revealed an average and aggregate willingness to pay of US $7.5 and 694,141, respectively, for a change from status quo to high impact improvement scenario. It is, thus, recommended to take rehabilitation and conservation measures to ensure sustainable use and management of wetland resources in the area.

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Notes

  1. Wetland resources herein refer to open water of the lakes, the land surrounding the lakes that is saturated or covered with water; and the biodiversity—floras and faunas—found there.

  2. Kebele is the smallest administrative unit in Ethiopia.

  3. This figure of female-headed HHs might be attributable to the prevalence of polygamy in the study area.

  4. The iid assumption is identical to IIA (independence of irrelevant alternatives) assumption—the probability of choosing an alternative is unaffected by the presence or absence of other alternative in the choice set (Kjaer 2005).

  5. ASC captures the average effects on utility of all attributes/factors that are not included in the model.

  6. Interacting socioeconomic variables with ASC is the common approach to introduce observed heterogeneity in many CEs. In that case, it will not affect the MWTP (Birol et al. 2006).

  7. McFadden’s ρ2 values between 0.2 and 0.4 imply that the model fits the data well (Hauber et al. 2016).

  8. Models with less negative LL-test value better explain the pattern of the choice in the data (Hauber et al. 2016).

  9. Sources: the woredas’ rural land administration and environmental protection bureaus and woredas’ agriculture and rural development offices.

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Acknowledgements

The authors extend their profound gratitude to Addis Ababa University (AAU) and Bahir Dar University (BDU) for their financial support for accomplishment of this study. We are also very grateful to the people of the study community and sample respondents, agricultural development agents, and local administrators of the study area for their assistance during the field work. The authors wish to warmly thank anonymous reviewers for review and their constructive comments which have immensely helped to improve the quality of the paper.

Funding

This study was funded by Addis Ababa University [2016–2018] and Bahir Dar University [2015/16].

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All authors contributed to the study conception and design. Preparation of data collection materials/instruments, data collection, data analysis and writing the manuscript were performed by [FD]. [FS, Ph.D., Associate Professor] and [DDG, Ph.D.] participated in the study design, shaped and commented on the data collection instruments, supervised the data collection, technically supported the data analysis and read, commented and revised the manuscript. All authors read and approved the final manuscript.

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Correspondence to Fitsum Dechasa.

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Appendix

Appendix

See Tables 7, 8, 9, 10.

Table 7 Description of attributes and their levels used in choice experiment
Table 8 Sample choice set
Table 9 Alternative wetland scenarios and their attributes
Table 10 Results of multinomial logit models and random parameter logit models

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Dechasa, F., Senbeta, F. & Guta, D. Economic value of wetlands services in the Central Rift Valley of Ethiopia. Environ Econ Policy Stud 23, 29–53 (2021). https://doi.org/10.1007/s10018-020-00277-4

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